When Louise Tsao first set up her online shop on Taobao, the Chinese equivalent to eBay owned by Alibaba, in 2006, it did not quite work as a business. The university graduate from Hangzhou, the city where Alibaba is headquartered and which has become China’s ecommerce capital, was trying to sell affordable fashionable clothes but too often indulged her own love for fashion. “At first I’d buy 10 things a day but only sell one,” she remembers.
That is history. Last year Ms Cao’s online store, 7Gege, had Rmb350m in revenues, and she expects sales to increase to Rmb600m this year. The 30-year-old is a typical example of the immense impact Alibaba has had on China’s economy. Just 10 years after setting up its online retail business, the company says the combined merchandise value on Taobao.com, the consumer-to-consumer platform, and TMall, the online mall where businesses sell to consumers, exceeds Rmb1,000bn ($163bn), with more than 8,000bn product listings on the two sites.
That growth has created several million jobs in online stores and the service industries around them, according to Alibaba and Hangzhou government officials. The Chinese Ecommerce Research Centre estimates that last year alone, the Chinese ecommerce industry created more than 2m jobs directly and more than 12m indirectly. With Taobao responsible for 90 per cent of consumer-to-consumer online retail transactions by value, and TMall controlling half of the business-to-consumer online market, this jobs creation is mainly due to Alibaba.