Asia is now the world’s biggest online retail market and Alibaba Group, owner of China’s top online shopping websites, is the No. 1 e-commerce company in Asia in combined sales, according to Internet Retailer magazine.
In its just-published 2013 Asia 500 report, Internet Retailer found direct-to-consumer e-commerce sales in Asia reached $378 billion in 2012, ahead of Europe’s 2012 retail web sales of $315.9 billion and the U.S. with 2012 e-commerce sales of $225 billion. “Driven by explosive growth in China—soon to be the biggest single national e-commerce market—Asia is also the fastest growing” e-commerce market, the magazine reported.
Chicago-based Internet Retailer produces the annual Top 500 Guide, which ranks and profiles the 500 largest e-retailers in the U.S. The Asia 500 report marks the first time the magazine has ranked and profiled the 500 largest e-retailers in Asia.
The report concluded that “Asia is a series of diverse national online retail markets, each with its own distinct audience of web shoppers and at its own stage of e-commerce evolution.”
Researchers were particularly struck by the dominance in Asia of e-commerce marketplaces, which are Web-based platforms that host thousands of independent online retailers.
“If there is a theme that recurs in many of the biggest Asia-Pacific e-commerce markets ranked in Internet Retailer’s newly published Asia 500,” researchers wrote, “it is the preeminent role of the online marketplace as opposed to individual retailers selling on their own behalf.”
For example, Alibaba Group websites Taobao Marketplace and Tmall are marketplaces, as is Japan’s largest online shopping venue, Ichiba.
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“In China, Alibaba and its Taobao and Tmall marketplaces account for 82.2%—$170.00 billion—of all Asia 500 sales in China and 77.6% of all estimated 2012 Chinese direct-to-consumer sales of $219.1 billion,” according to the report. “In Japan, Rakuten’s Ichiba shopping mall accounts for 49%—$9.76 billion—of all Asia 500 sales in Japan and 7.56% of all estimated 2012 Japanese retail web sales of $129 billion.”
“The 2012 combined sales of Alibaba (No. 1), Rakuten (No. 2), eBay Inc. (No. 7) and Trade Me Group Ltd. (No. 73) totaled $182.77 billion and accounted for 73.5% of all Asia 500 retail sales of $248.70 billion. All these sites play host to many merchant storefronts.”
What gives Web marketplaces their staying power? Says Internet Retailer:
“Marketplace companies in certain Asian countries have become preeminent e-commerce players because they have evolved into comprehensive ‘one-stop support service and shopping centers’ for buyers and sellers, says Julia Q. Zhu, founder of e-commerce research firm Observer Solutions and a former Alibaba employee. ‘Once online users grow accustomed to an online shopping site and as long as the online marketplace continues to evolve with their needs, then users have little incentive to switch,’ Zhu says. ‘Over time the brand loyalty leads to a concentrated user base, which is hard to compete with. In Asia, this can result in a dominant marketplace in some countries.’ “