Alibaba continues to be the leading e-commerce company in China. (Photo : Reuters)
Amid the tough competition in the e-commerce sector, the Alibaba Group remains as the role model for rival firms when it comes to developing business strategies and transforming innovative ideas to reality, Guangzhou’s South Reviews stated.
Other industry players are gradually looking like Alibaba as they follow the e-commerce giant's lead in covering third-party platforms for Web-based vendors.
According to the magazine, running an e-commerce business is akin to being a commercial property landlord, citing the sector's lucrative market in the country.
Alibaba has long been holding the top spot when it comes to gross margins among China's top three Internet companies, which also include Baidu and Tencent. For the fourth quarter of 2014, the company pulled off a whopping 71.3-percent gross margin.
JD.com, or Jingdong Mall, is one of the firms trying to embody the strategies and framework of Alibaba for business expansion. The online retailer that kicked off in 2007 had a total of 100.9 billion yuan turnover last year for its e-commerce platform, a 217-percent increase from 2013.
The retail sector of JD.com also fared well, gathering a total of 159.3 billion yuan turnover. However, its gross margin is only 7 percent in contrast with its e-commerce sector's 70 percent.
Having a higher margin on its e-commerce platform, JD.com has decided to shift toward the Web-based selling business. For 2014, the shift has aided the firm to tally a total of 11.6 percent overall gross margin, up from a previous statistic by 1.8 percentage.
Nonetheless, experts see this movement--rival firms copying Alibaba's strategies--as bad news for the e-commerce sector, stating that such phenomenon hampers creativity and innovation.
Alibaba climbed to the top post by introducing sellers' ratings and venturing on third-party payment service Alipay. According to the magazine, this has helped build the e-commerce giant's credibility.
South Reviews pointed out that for a sector to continually flourish, Chinese firms should devote effort to make innovations and not just think and ponder on marketing strategies targeting younger demographic.
