Paul Lachine

China’s E-Tail Revolution

Mass consumption in China and other emerging economies is coming of age in the Internet era. Given that industry structures are still developing in many of these countries, e-tail is set to shape not only the retail landscape, but also the manufacturing and financial services industries – and even the urban landscape itself.

SHANGHAI – When you think about centers of technological innovation, Silicon Valley, Seattle, and Seoul are probably the first places that come to mind. After all, they are the homes of Amazon, Apple, Facebook, Google, Intel, Microsoft, and Samsung – companies whose innovations transform the way other sectors, from financial services to telecoms and media, do business.

Now, however, the rise of “e-tail” (consumer-facing e-commerce) in China is enabling Hangzhou – the base of Alibaba, China’s largest online retailer – to join their ranks. Indeed, on April 29, Alibaba signaled its ambitions by buying an 18% stake in Sina Weibo, China’s version of Twitter. And, as with technology hubs elsewhere, innovations born in Hangzhou are determining the development path of related industries.

China’s e-tail market is the world’s second largest (after that of the United States), with an estimated $210 billion in revenue last year. Since 2003, the market has posted a compound annual growth rate of over 110%. By 2020, China’s e-tail market could be as large as today’s markets in the US, Japan, the United Kingdom, Germany, and France combined.

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