2 points:
- you are using the stats for "enterprises above designated size" which only counts companies with sales more than a certain figure, which I can't remember. The relevant data point is that for the full year 2015, sales recorded at enterprises above designated size accounted for 54% of total retail sales
- the most straightforward data point, instead of us trying to guess how big China's ecommerce sales are, is from NBS as well. in 2015, China ecommerce sales were 3877 billion yuan and BABA's GMV was 2950 billion yuan. So BABA's market share is 76% of China's ecommerce, which makes sense given its ubiquituity
http://www.stats.gov.cn/tjsj/zxfb/201601/t20160119_1306103.html
First, I'd like to thank Anonymous for calling my attention to the January 20th, 2016 Press Release re: China Retail Sales published by China's National Bureau of Statistics (NBS). This is valuable data and I was unaware of its existence until Anonymous pointed it out to me. Whoever you are....Thank you!
Next, I'll assume that Anonymous has a strong financial background, has knowledge and understanding of the NBS Publications (since he/she has sent this to me) and is fluent in Chinese (the link he/she provided was the Chinese version of the data)
Fortunately, there's an English version of the Press Release posted on the NBS site as well. I'll refer to that document to avoid any translation mis-steps.
English Version
http://www.stats.gov.cn/english/PressRelease/201601/t20160120_1307123.html
Also, thanks to Anonymous for the 54% metric....I was looking for that and I didn't see it. The Press Release shows that Retail Sales for "Enterprises above a designated size" looks to be 49% of the 2015 total "Physical Goods" (133,891/268,621) so I'd suggest that this is a more appropriate benchmark.
So now...let's examine the numbers in a little more detail....
Below is the statement and the full table Anonymous was referring to re: Alibaba's market share being "76% of China's eCommerce". Id' suggest that, based on the numbers, Alibaba is even more dominant than Anonymous had suggested..
In 2015, the national online retail sales of goods and services was 3,877.3 billion yuan, increased 33.3 percent year-on-year. Of which, the online retail sales of physical goods was 3,242.4 billion yuan, increased 31.6 percent; the online retail sales of non-physical goods was 634.9 billion yuan, increased 42.4 percent.
Given the above, since Alibaba, according to their filings, press releases and investor calls only participates in the sale of "physical goods", they actually have a 91% market share (2.950T/3.242T) of all eCommerce in China. Again, based on these figures, Alibaba is nearly the entire eCommerce ecosystem in China. Remarkable to say the least.
Here's the entire table contained in the NBS Press Release:
Moreover, when we compare the Alibaba GMV in 2015 to all Retail Sales in China, in the physical goods categories that their filings, investor calls and press releases purport that they participate in, we see that the Alibaba's market share is the equivalent of 44% of all retail sales in China. In other words, nearly half of all clothing, shoes, lipsticks, shampoos, refrigerators, TVs, stereos, desks, computers, couches, chairs, beds, phones, etc. are sold and delivered through the Alibaba ecosystem. Again, this is remarkable.
Alibaba's Competition
Now, let's take a look at the rest of the eCommerce businesses in China. In the fall of 2015 China Internet Magazine released it's list of "Top 100" eCommerce businesses.
Observations on the above:
- As we mentioned above, Alibaba is 91% of all eCommerce in China. The rest of the businesses are relatively insignificant. Of the top 100 eCommerce businesses, the next largest ecosystems are Baidu (Qunar & Nuomi) and JD.com each about 6% of Alibaba's reported GMV. To the casual observer, it might appear that the Chinese consumer just doesn't seem to be all that excited about any of the other non-Alibaba eCommerce business.
- In just four years the cCommerce Industry in China has grown from virtually "non-existent" to 44% of all applicable category Retail Sales in China.
- Interestingly, with the exception of Suning (an Alibaba "Investee"), there are no "brick & mortar" retailers selling a material percentage of their wares via proprietary eCommerce sites. As an aside, in the US, once eCommerce took off, traditional retailers, Walmart, Best Buy, Apple, Home Depot, CVS, Lowes, etc. jumped into the eCommerce fray to prevent the erosion of their traditional revenue stream. This hasn't happened in China. Presumably the managers of the "brick & mortar" retailers felt comfortable letting 44% of their category revenue walk out the door in just a few short years. Guess they just didn't see it coming?
- Eight (8) of the Eleven (11) largest eCommerce businesses in China, the four (4) Alibaba Businesses (Taobao, TMall, 1688, Suning) JD.com, Amazon China, Baidu (Qunar & Nuomi) and VIPShop are all listed on US Exchanges. Sadly, it seems the hard working people of China won't be able to invest and participate in this eCommerce miracle, reaping the huge financial rewards from the certain, guaranteed success of these businesses. All the wealth will accrue to US Investors. The Chinese people will learn perhaps the hardest lesson of capitalism, that the rich do indeed get richer. Frankly, I just can't understand how China's leadership could let this golden goose slip away. (Author's Note: for my Chinese readers using Google Translator or some other tool, the above bullet point is what we in the United States refer to as "sarcasm".)
- Finally, when we compare the verified GMV (per SEC filings and Company Press releases) of the eleven (11) largest eCommerce businesses, we see that the GMV of these businesses actually exceeds the comparable total GMV reported by the NBS. In other words, for the numbers to balance, the remaining eighty-nine (89+) businesses would have to report negative GMV of 374 Billion Yuan (US$58 Billion). Unfortunately, like anti-matter, negative GMV (sales) doesn't exist on this planet.
With the meteoric increase of eCommerce in China, you'd think we'd see a bit of what we might refer to as the Walmart/Amazon effect. When a sea-change competitor enters a market we usually see dramatic shifts in the landscape. For example, when Walmart drops a Super Center in a small community, Mom & Pop commodity-type retailers (hardware stores, department stores, grocery, etc) in a 20 mile radius suffer significant revenue loss and/or eventually go out of business. Moreover, an eCommerce business like Amazon increases pricing/margin pressure. "Why should I buy a coat, hardware or a home theater at the local store when I can get the same merchandise on-line for 20% less?" Industry Sales don't necessarily increase, they are shifted from one marketplace/competitor to another. Brick & Mortar businesses must either adapt to the new paradigm or suffer accordingly. (JC Penny, Sears, Barnes & Noble, Circuit City, Blockbuster, Borders, to name a few)
Interestingly, even with the huge expansion in eCommerce, we've not seen anything near a slowing or pullback in the growth of Brick & Mortar retailers in China. According to Statista, in 2014 there were 87,652 retail businesses in China, compared with 58,471 in 2011, a 50% increase (about 15% per year) in just three (3) years. I've seen nothing in the financial press reporting wholesale realignment/closing of retail units in China, despite 44% of all Retail Sales transitioning to the Alibaba ecosystem where presumably no storefront is needed. If Alibaba didn't exist would the Retail Business growth rate be 30% per year even though the Disposable Income growth rate has been roughly 10% per year since 2011? Anonymous, if you have anything at all on this topic I'd appreciate it if you'd share it with me.
The Thesis....
Based on the above, I'll repeat the theme/thesis I've been describing in the blog for more than a year.
Is it more likely that Alibaba is the eCommerce miracle it claims to be, defying economic gravity, with published un-explainable, unverifiable metrics that fly in the face of logic, reality and nearly every published data point out there? Perhaps the NBS data is just wrong? Perhaps the house-of- mirrors NBS Survey data (self reporting with a systemic, political incentive to mis-report) is divorced from economic reality and Alibaba's meteoric growth is accurate?
Or:
Is it more probable that Alibaba and the entire "China Dream" is the greatest financial fraud, perpetrated by US Investment Banks, on naive, trusting US Investors in the history of finance?
Again, this is just a thesis.....I'm not directly accusing anyone of anything....just asking a few questions.
Finally, Anonymous, if you have anything else you'd like me to review please pass it along. I'll be happy to take a look at it. Again, thank you for sharing.
Additional Materials/Links
100 Top US Retailers
https://nrf.com/2015/top100-table
100 Largest E-Commerce Businesses
http://www.chinainternetwatch.com/14911/top-100-e-business-companies-q3-2015/Caixin Article - 11/2/15
Today, Alibaba's Tmall controls 58 percent of the market for retail e-commerce sales in China, according to iResearch Consulting Group. JD.com holds second place with a 20 percent market share, while Amazon is a distant eighth with 1.1 percent.
http://english.caixin.com/2015-11-02/100869131.html
China Internet Watch - eCommerce
http://www.chinainternetwatch.com/14911/top-100-e-business-companies-q3-2015/#ixzz40Z2dsYBu
Amazon's Ecommerce in China is a rounding error on the 10k.......Caixin says it's about 42 b RMB or 1% of total China eCommerce.
http://www.sec.gov/Archives/edgar/data/1018724/000101872416000172/amzn-20151231x10k.htm
Dianping - MeiTuan Merger
http://finance.yahoo.com/news/alibaba-sell-stake-meituan-dianping-report-080342153.html;_ylt=AwrC1zHxV8ZWyzMA8RaTmYlQ;_ylu=X3oDMTEyNmo2aW9rBGNvbG8DYmYxBHBvcwMyBHZ0aWQDVklEMDVfMQRzZWMDc2M-
Baidu Financial Results - SEC Filing - 9/30/15
http://www.sec.gov/Archives/edgar/data/1329099/000119312515359040/d93806dex991.htm
Note: that the term GMV did not appear in the Baidu SEC filings until Q2 of 2015.
Retail Businesses in China
http://www.statista.com/statistics/277807/number-of-retail-companies-in-china/
China Disposable Income
http://www.statista.com/statistics/289186/china-per-capita-disposable-income-urban-households/
I thought that are lot of the parcel volume is empty boxes I think estimate before the ipo was 20% this was Alibaba customers gaming the system to get better rebate terms
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