The Lunar New Year (LNY) holiday gave China’s online shoppers ample opportunity to overwhelm Taobao.com, China’s largest internet retail site, clocking up US$249 million in sales. The figure was around US$100 million more than anticipated, even as some Taobao’s shops stopped offering delivery due to the flood of demand
Taobao is owned by Alibaba Group, whose online payment tool Alipay also gained traction as an alternative to the Chinese tradition of giving hongbao – 15,000 Alipay “red envelopes” were sold.
Through its varied products, Alibaba Group (its listed unit, Alibaba.com (1688.HK), only includes the popular B2B forum widely used for product sourcing) remains the key power in Chinese e-commerce markets. It has already managed to all but completely force out foreign rivals such as eBay (EBAY.NASDAQ) and Amazon (AMZN.NASDAQ) and retains the edge of various local competitors.
The group’s strong LNY performance together with a growing appetite for online shopping among Chinese – they spent US$36 billion in 2009, up 100% year-on-year – is further proof that its products have come of age in domestic markets and can make further efforts to extend their capabilities beyond China. Alipay has recently been adopted as a payment option by US domain registrar Go Daddy and German e-commerce operator asknet AG (A5A.ETR).