The sheer volume of ecommerce sales taking place in China, which overtook the United States in October to become the world’s largest economy, according to the International Monetary Fund, has prompted its government to start giving preferential policy treatment to this booming sector.
People in China and overseas bought US$9.3 billion worth of products on Singles’ Day, with the largest ecommerce site, Alibaba, ringing up a new record of an astonishing $2 billion in an hour, according to state media. Singles’ Day is meant to encourage online shopping and falls on November 11. The term doesn’t allude to the unwed but to the sequence of numbers on November 11: 11.11.
Overall, Alibaba, which last month went public in New York with a $25 billion valuation – the world’s biggest – took in a total of over $8 billion on the day, as shoppers snapped up all manner of bargains, another record for the online retail giant. JD.com, China’s second-largest ecommerce site and which also floated in New York this year, reported that it took more than 14 million orders on Singles’ Day for 35.19 million products.
With these stratospheric numbers, there’s little surprise why the Chinese government is sitting up and taking notice. The country’s State Council issued a recommendation after Singles’ Day saying the government should give preferential support to ecommerce as a powerful driver of economic growth, as enormous numbers of people are now using ecommerce sites over traditional bricks-and-mortar stores to make their purchases. Indeed, many sites employ Magento ecommerce to entice online shoppers with attractive displays, effective navigation and easy checkout.
Policymakers in China have been seeking to promote the IT sector as it roars ahead over others, particularly manufacturing and related exports, which have been showing signs of slowing amid overall mild stagnation of traditional sectors of the economy. The State Council said the government must actively develop policies to support ecommerce and the technologies it uses, especially for secure processing of payments and overall logistics.
Given the massive clout of China’s economy and the enormity of its citizens’ purchasing power, other countries will be looking to see how the government will help to further progress ecommerce. It’s a safe bet that other governments will swiftly follow suit with policies of their own.