Chinese e-commerce giant Alibaba Group Holding Ltd is hoping to generate sales that is equivalent to the fifth-largest economy in the future, after establishing a new record at the recent annual Singles' Day online shopping event.
In a statement sent to the Global Times, Alibaba said that for the fiscal year 2016, the company has exceeded 3 trillion yuan ($440 billion) in annual gross merchandise volume (GMV), a year-on-year increase of 27 percent. With the sales from this year's Singles' Day, also known as Double 11, more than tens of billions is expected to be added in its daily GMV.
Alibaba said in the statement that by combining the countless individuals and enterprises in the world doing business with them, a "new economy" can be created based on the company's current growth rate, that that can equal the GDP of an economy next to the U.S., China, the E.U. and Japan.
Zhang Yi, CEO of Guangzhou-based market research firm iiMedia Research, however, said that a country's GDP cannot be compared to the company's output, although Alibaba's business model has made significant influence on enterprises, both in China and overseas.
"In the past decade, the e-commerce model has been playing a major role in solving the problem of asymmetric information in the marketplace, but it will focus more and more on how to better integrate online and offline sectors in the future, which will reshape global economic and trade landscape," Zhang said.
Last Friday, on Singles' Day, Alibaba's Tmall posted a daily sales volume of 120.7 billion yuan. At least 235 countries and regions and 94 brands joined this year's Single's Day online shopping event, breaking its sales record of more than 100 million yuan, according to its statement.
According to Liu Dingding, an independent industry expert, Alibaba will continue to grow in the next five years since the "growth ceiling" in online retail has not yet been reached.
"Meanwhile, Alibaba is helping create hundreds and thousands jobs, which could also be seen as a contribution to the world development," Liu noted.
Industry analysts, however, cautioned Alibaba about future challenges, especially in cross-border trade and regulations.
In September, WTO said that since the financial crisis, global trade has been on the decline and this year's growth is seen to be the slowest.
In line with Jack Ma's proposal to build an electronic world trade platform (eWTP), Alibaba enhanced its cross-border transactions by including the strategy of "buy globally, sell globally" in this year Double 11 shopping bonanza.
Jack Ma's envisioned platform is expected to help small- and medium-sized enterprises (SMEs) to hurdle complex regulations and process that often prevent them from joining global commerce.
Liu said that Alibaba's recent success will drive SMEs to upgrade their businesses, help the real economy and bring more profits.
On the other hand, Zhang noted that it was not only Alibaba that was trying to build a global business cycle but they did not succeed.
"Finding complementary areas for doing business is crucial for Alibaba, as shown by JD.com, another Chinese online supplier, which has purchased some of overseas retail marketplaces to better serve the diversified demand in China," Zhang noted.