Alibaba plans to double its transaction volume in four years and remove counterfeits from its platforms.
Alibaba would concentrate on sustainable growth and high quality as sales transaction volume on its marketplaces slowed down significantly before the end of financial year, indicating the challenges faced by the company in removing fake goods that adversely affect its platforms.
During an event on March 21, 2016, at the head office of Alibaba in Hangzhou, China, it told its transaction volume had reached $464 billion (3 trillion Yuan) which represents a growth by 23% from 2015, with less than two weeks remaining in the year-end at March 31, 2016. In comparison, in the last fiscal year, the gross merchandise (GMV) of the Chinese e-commerce company grew at a rate of 46%.
GMV refers to the total worth of the third-party merchants’ transactions on the platforms of the company. It differs from the revenue earned by Alibaba but analysts and investors closely track GMV because it demonstrates the pace at which the business increases relative to rivals.
The $464 billion figure represents an increase in the organization’s GMV by three times since 2012 and increasing twice since 2013. On March 21, 2016, Alibaba Executive Vice Chairman Joe Tsai told the company achieved “unprecedented scale,” as the transaction in terms of dollars on its marketplaces equals to the sixth-biggest Chinese provincial economy.
He acknowledged that the organization faces crucial challenges in future. The business expects to reach six trillion Yuan in terms of the transaction volume on its platforms by 2020.
Tsai posted on the news site of Alibaba that the organization is recruiting high-quality brands, particularly those abroad to join its marketplaces. Since December 2015, the company has laid emphasis upon “quality” growth of its financial metrics as it is criticized for counterfeit goods on its platform – and questions regarding whether the organization is acting sufficiently to solve these problems.
Previously in March 2016, broadcaster CCTV accused that counterfeit sales continue to be widespread on Alibaba, which raises questions regarding its GMV, according to industry watchdogs.
Alibaba challenged the accusation by claiming that it uses modernized tools to identify counterfeit transactions involving merchants paying people-to-people fake orders and exclude them from its financial results.
The Chinese ecommerce organization has also been in the hot seat for fake items on its platforms, with some Western companies calling for the relisting of the organization’s Taobao shopping website – a virtual market where almost everyone can establish a shop – on the “notorious” market list of the United States Trade Representative for fake goods.
The company responded it would make every effort to remove counterfeit goods from its platforms. The $464 billion landmark is not much for the company, whose co-founder and Chairman, Jack Ma, and other officials pointed to a different landmark: surpassing Wal-Mart to turn into the largest retail network of the world.
