“Our competition with 360Buy is over. […] They’re struggling.” So said Alibaba’s Zeng Ming in a talk with media this morning, dismissing the closest rival to its Tmall site in China’s fierce business-to-consumer (B2C) e-commerce sector.
“I no longer look at 360Buy at all,” added Prof. Zeng Ming, Alibaba’s chief strategy officer, before wondering aloud if 360Buy can even make enough money to survive. China’s B2C sector is worth nearly $100 billion in terms of sales. While Alibaba’s Tmall leads with 41.5 percent market share, 360Buy seems a strong second with 15.5 percent of the pie.
But the slam on 360Buy was aimed more widely – at the whole B2C sector in China. In the talk at Alibaba HQ in Hangzhou, eastern China, this morning, Zeng stressed that Alibaba likes to be a platform, not a buyer of goods – and the same extends to the online shopping site Tmall. While 360Buy acquires all its goods and keeps them in its own warehouses – and is even now moving into delivering them via its own logistics company – Tmall does none of that. If you buy, say, a Nike T-shirt on Tmall, then Nike or its local partner sends that to you. In that respect, Tmall is B2B2C. The implication is that it’s cheaper, more sustainable.
Asked by a Forbes reporter if Alibaba might get into logistics itself, Zeng replied, “Definitely not.” Well, since Tmall doesn’t buy any goods itself, it doesn’t really have anything to deliver.
Zeng emphasized that the platform approach is better for the company – and, he claims, for the e-commerce sector as a whole. The attack on the centralized B2C ethos comes at a time when a few specialist, vertical Chinese sites have gone under, apparently weighed down by the costs involved. In recent months we’ve seen Vcotton hit financial troubles, and the once-promising Yaodian100 vanished off the web in mysterious and worrying circumstances.
Earlier this summer we reported that 360Buy might launch its much-anticipated US IPO – albeit at perhaps half the value of its previous funding round. Failing that, series D investment might be the way to go. The official line from 360Buy’s CEO, Liu Qiangdong, is that he has nothing but money – enough, even, for the controversial recent price war.