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Our blog focus is on China and the country’s migration to E-Commerce. According to Olsen (2010) article entitled China’s Migration to E-Commerce on Forbes.com, The China Internet Network Information Center stated that the number of internet users in China jumped 28.9% in 2009 to 384 milllion! On top of that China’s online shopping sales rose to $ 36.6 billion. The main reason for this success penetration to E-Commerce is that retailers are able to make customers feel more comfortable while doing online businesses. China’s online shoppers are youngsters mainly around 18 to 35 years of age. Like many other countries including Malaysia, China customers encounter trust problems while doing online transactions. Thanks to new third party payment system called Alipay (owned by Alibaba), the system is able to resolve those issues. Therefore, now customers feel safe while making online payments :)
Moreover, the success of companies such as Alibaba and Taobao have driven many companies in China to be extremely keen on the internet industry and will be explored deeper in later postings. Have anyone of you tried exloring Alibaba or other popular China websites? If yes, why do you think these companies are so successful? Let us know and drop in some comments :)
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Reference:
Olsen,R., 2010, China’s Migration to E-Commerce , http://www.forbes.com/2010/01/18/china-internet-commerce-markets-equities-alibaba.html, viewed 4 September , 2010
Hi Edith and Fiona,
ReplyDeleteAlibaba indeed is one of the leading B2B online marketplaces in the world. In my opinion, one of the driving success factors is that Jack Ma, CEO of Alibaba was able to identify the needs of China people and fulfill it. For example, Alipay service came about as Jack Ma realized that not many Chinese own credit cards, hence it was difficult for them to make online payments. With Alipay, Alibaba helps customers to manage their payments securely. With Alipay, buyers deposit money in a bank account, Alipay keeps the money in escrow and only releases the money when the buyer confirms receipt of their goods (Einhorn 2009).
Another key factor is the importance of trust when making transactions online. With such a large number of suppliers to choose from, it is difficult to know who you really can do genuine business with. The company has a Gold Supplier program, where suppliers pay an annual fee to gain verification from Alibaba. This can help boost customer confidence and trust to deal with the suppliers.
References:
Einhorn, B 2009, How China’s Alibaba is surviving and thriving, Bloomberg Businessweek, viewed 5 September 2010,
http://www.businessweek.com/magazine/content/09_16/b4127059272628.htm
Thank you evelyn for your comment!
ReplyDeleteIndeed Alipay's tagline is "simple,secure,speedy".
In fact even international merchants can bebefit from Alipay.Alipay Cross-border Epayment Service refers to that the buyers will directly use RMB to buy the thins on international merchant websites, and Alipay will pay foreign currencies to the international companies in settlement.international firms can now penetrate Chinese market at low cost and high efficiency.
Reference:
http://market.alipay.com/ospay/faq/faq.html, viewed 7 September 2010
Theres some information I would like to add on as well. As we know that China is the leading independent third-party online payment platform, Alipay has became the preferred online payment tool of Internet merchants because of great help with its innovative advanced product technology, unique concept and larger user base. In addition to Taobao and Alibaba.com, more than 460,000 external merchants also employ Alipay services for transactions such as online purchase, virtual gaming, digital communications, commercial service, air ticketing and utilities fee payment.This is considered to be quite a huge amount of people doing these services.
ReplyDeleteIts mission is to to provide a safe and reliable online payment service. In addition to the SSL-constructed safe digital transmission channel, Alipay provides high-quality, tailor-made security products and solutions catering to users, including digital certificates, mobile dynamic passwords, security control, SMS notification, dual password and back-end real-time risk treatment system. Its reputation in the online payment industry, advanced technology, refined market forecasting ability and social responsibility is said to have won the recognition of its partners. Apart from that, Alipay has strategic cooperative relationships with all 19 Chinese national banks, including Industrial and Commercial Bank of China, Bank of China, Agricultural Bank of China, China Merchant Bank and nearly 40 local commercial banks such as Bank of Shanghai as well as international institutions like VISA, cooperating with different kinds of fund channels across the nation.
Reference:
Alipay.com 2009,viewed 13 September 2010
http://market.alipay.com/ospay/aboutAlipay/wideCooperationInFinancingChannels.html