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Chinese e-commerce grows rapidly in Q1; Alibaba/JD.com dominate

  • China's total online shopping GMV rose 27.6% Y/Y in Q1 to RMB456.4B ($73.1B), estimates iResearch. The growth rate is roughly on par with Q4's 27.5%, albeit down from Q3's 47.7%.
  • iResearch (citing government data) notes e-commerce made up an estimated 7.4% of Q1 Chinese consumer retail sales, and expects full-year GMV growth to be around 30%.
  • Business-to-consumer (B2C) transactions accounted for 39.9% of GMV, up from 35.2% a year ago and just 24.6% in Q1 2012; consumer-to-consumer (C2C) activity accounted for the rest. Alibaba's (ABABA) Tmall site remains the B2C market's 800-lb. gorilla, grabbing 50.6% of GMV.
  • JD.com (JD), set to go public ahead of Alibaba, had a 23.3% share. Fast-growing Vipshop (VIPS +1%) was the market's #3 player, but had only a 3% share. Dangdang (DANG -0.4%) claimed 2% of the market, and Amazon.cn 2.1%.
  • On the mobile side, Alibaba's Taobao site (C2C) had a 76.4% share of mobile shopping GMV. JD.com and Vipshop respectively had 6.9% and 2%.
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Comments (13)
  • kwikscan
    , contributor
    Comments (9) | Send Message
     
    Anyone have any idea why Dang doesn't tie up with others? They can never rise above 2% market share, their cap is a measly 700 million, their pps is sub 10. An idiot could see the need to M&A to stay in the fight but not dang. Oh well, at least we have alibab coming soon to invest in.
    20 May, 03:05 PM Reply Like
  • eager1
    , contributor
    Comments (125) | Send Message
     
    I sold my DANG after reading up on it. What I heard is that they lost two CFOs in a reasonable short time and the owners get most of the blame because they will not allow the business to grow by doing M&A. So the business stagnates and slowly dies. You are right that they should have merged a long time ago. Perhaps there is a integration problem that prevents buyers from buying or perhaps we wait until they die and somebody buys their remains.

     

    Correct me if I am wrong but JD looks interesting and is probably the best B2C business in China and they are building out their warehouses like crazy. Interesting to hear 70% of transitions are delivered by their own people whereas AMZN relies on USPS and UPS. JD seems closest to Amazon in structure. Alibaba made most of their money in B2B and C2B but they are trying to get into B2C. That will probably lower their profit margin a lot. VIPS, as I understand, is mostly consignment items and overstock like Ross Stores but doing a bang-up business.
    20 May, 04:50 PM Reply Like
  • nebulae1
    , contributor
    Comments (6) | Send Message
     
    JD does no make money. The sell very low-margin goods. Alibaba has about 50% margin. As simple as that. So probably a bad decision to buy JD's stock.
    20 May, 06:45 PM Reply Like
  • James Sands
    , contributor
    Comments (2098) | Send Message
     
    JD is going to grow its market value much more over the long-term than Alibaba and will not require as high margins to grow GAAP earnings well. Depending on tomorrow's initial price the stock offers long-term value.

     

    We need to remember that GMV comparisons are great, but based on total revenue, Alibaba is still playing catch-up to JD.
    21 May, 07:04 PM Reply Like
  • geminisplit
    , contributor
    Comments (4) | Send Message
     
    Alibaba also building their own logistic network called China Smart Logistic Network (CSN) in 2013 where Jack Ma resign from alibaba and become the CEO of this network company the very next day. The logistic network is a collaboration with other delivery companies and it empowered by alibaba cloud computing aliyun network calculation. Their warehouse, items flows and sheer size make them having clear advantages over JD with aim of delivery within a day, reduce warehouse operating cost and more efficient logistic network. Even US logistic network isnt empowered by cloud computing, China ambition on logistic will be the world very first attempt. JD trying to raise fund for more warehouses in China but without the technology, they not in the same league to compete with alibaba.
    22 May, 04:12 AM Reply Like
  • James Sands
    , contributor
    Comments (2098) | Send Message
     
    Not sure I by the fact that Alibaba's "technology" is superior today versus long-term against JD. Alibaba does not have much infrastructure, nor do the deal with inventory and any new endeavors do not come without risk on that front. So basically this is value-added service by a third-party, which will be different than JD's operated value-add.

     

    JD's brand is strong too, e-commerce B2C sales are growing stably at 65% YOY, and marketplace/value-add are growing near 120% YOY, both out pacing Alibaba with near double scale.

     

    Let the competition in the public eye begin. JD will hit USD $50 billion in revenue before Alibaba....
    22 May, 09:36 AM Reply Like
  • Shaduc
    , contributor
    Comments (1354) | Send Message
     
    Alibaba is like an computer based flea market, while JD is like Costco, which is limiting.
    22 May, 09:59 AM Reply Like
  • James Sands
    , contributor
    Comments (2098) | Send Message
     
    Yea, JD first bid is near $70/share which means $100 billion market cap; and Alibaba hype is going to push this company's market cap near $250-300 billion, these levels are way to high....wait for pullbacks.....
    22 May, 10:11 AM Reply Like
  • James Sands
    , contributor
    Comments (2098) | Send Message
     
    Guess my info was way off on the bid side....

     

    Costco and Amazon models are much more similar to JD as you state Shaduc, and at young growth stages for these companies, investors have made a lot of money over time.

     

    JD has the potential to get to a $100 billion market cap and today's price level around $30 billion is a good entry for the long-term.
    22 May, 11:28 AM Reply Like
  • nedilwo
    , contributor
    Comments (63) | Send Message
     
    Got that right on all fronts. DANG seemed to have a good story, then went no where but down. First I heard about the CFO's. Anyone have a link for the story? I bot at 9.28 and sold at 16.25 as it headed down. I see a number of articles stating it's a good time to buy. I think not.
    21 May, 03:15 AM Reply Like
  • bigfish1977
    , contributor
    Comments (8) | Send Message
     
    Currently Dang is a momentum driven stock only, what I mean by that is if you want to make a lot of money trading this stock because of its volatility you can, because it trades up or down 5% on any given day. it could easily ntrade back up to 13 for no reason at all. Long term outlook is a bit more unclear. As far as buying alibaba when it comes to the market, I hear they will have a stunning 200 Billion market cap, lol, no thanks, ill take my chance with the little guys
    21 May, 11:59 AM Reply Like
  • Chuyita
    , contributor
    Comments (4) | Send Message
     
    Ntrade back as you put it is the correct forecast for DANG
    could go to 13. If you got it for middle $9 sell it for $11.60
    Alibaba is the best bet over this new JD. Well developed
    and technologically advanced over the years go ABABA
    26 May, 04:41 PM Reply Like
  • nchezama
    , contributor
    Comments (3) | Send Message
     
    I believe the greatest potential for exponential growth in Chinese ecommerce is with Lightinthebox. They have struggled with revenue flow but business volume has shown significant growth. If they can manage some variable and fixed costs, they will soon experience impressive growth in net revenue.
    27 May, 06:09 PM Reply Like
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