Not too long ago, the world had its eyes on China as one of the fastest growing countries in the globe. Now its economy has been slowing down, and the future doesn’t look quite as bright any more. One of the bright spots in China’s economy was its e-commerce sector, where players like Alibaba were breaking new ground with their humungous sales figures. A new report, however, takes the sheen off these numbers.
An official report stated that a good 58.7 per cent of items in online trades in China were genuine or of good quality last year, with the remaining 40 per cent shoddy or counterfeit. 77,800 complaints were received concerning online orders, which is a huge rise of 356.6% against last year. The internet is a key driver of the nation’s economic progress in the last 5 years, amounting to 7% of the nation’s Gross Domestic Product (GDP) and 1% higher than the USA, with online shopping accounting to 20% of the nation’s demands.
According to (China Internet Network Information Centre (CNNIC), China boasts of 328 listed internet companies accounting for 25.6% of China’s market capitalization. Four of these internet companies are on the world’s top 10 list, including China’s own iconic giant, Alibaba. The credibility of this e-commerce portal has taken a beating, whilst Alibaba founder Jack Ma has been reiterating that his company has focused a lot on the scrutiny of its suppliers but complaints continued to mount. The turnover of the country’s online retail increased by 40 per cent annually and the number of online shoppers touched 361 million, amounting to 55.7 percent of the nation’s shoppers last year. The Chinese government seems to have taken a serious view of such counterfeits on the online platform and have made public the report.
Alibaba has also made a push into India, with investments in PayTm and Snapdeal. Snapdeal has been attempting to replicate Alibaba’s model in India of merely acting as an intermediary between buyers and sellers. It remains to be seen if e-commerce in Asia can rise above these challenges and win the trust of the local consumers.