Chinese government representative (NPC) Wang Tian on Wednesday accused the ecommerce platforms to help the retailers to evade more than $15 billion (100 million RMB) in 2012 alone. Alibaba, the Chinese ecommerce giant, itself contributes $5.5 billion (35 billion RMB) in this tax evasion saga.
To be clear, Wang isn’t saying the problem is e-commerce companies themselves — at least not entirely. Rather, he says that an investigation has revealed most sellers on e-commerce platforms don’t provide official invoices to customers along with their purchases. But those invoices, which are printed on special paper and must be purchased from the government, are the primary way the government taxes business transactions like consumer purchases — if sellers aren’t providing them, that means they’re not paying the taxes they should be.
How and to what extent e-commerce sites should be taxed has been a hot topic in China since online shopping became popular, but in part thanks to these numbers, the topic has bubbled to the surface again at this year’s Two Meetings. Chinese lawmakers are considering alternative ways to tax the industry. Song Lan, an assistant director at the State Administration of Taxation,expressed some skepticism about Wang Tian’s sky-high numbers but agreed that the taxation of e-commerce transactions was a serious problem:
E-commerce is a difficult topic we’re researching, because virtualized transactions are pretty difficult to monitor. Additionally, our [transaction] management methods are relatively outdated. So the taxation of e-commerce sites is something we’re researching right now.
The trick, of course, is to extract additional tax dollars from e-commerce platforms without crushing them, and Song Lan has said that the State Administration of Taxation is considering how to tax the industry in a way that promotes its healthy development while not, at the same time, allowing it to shirk its tax obligations.
It’s a difficult balance to strike, and one that authorities aren’t likely to take a crack at before this year’s Two Meetings ends. But the renewed attention could mean that new regulations might be coming sometime later this year. If e-commerce platforms are really resulting in billions in lost tax revenue, you can be sure that tax authorities won’t allow that situation to go on forever.
In an infographic released by the Chinese eCommerce behemoth Alibaba, there are 242 million online shoppers in China and they are expected to spend $265 billion in 2013. Alibaba.com in 2012 sold over $175 billion worth products and made a history by notching up $3 billion in sales in a single day.
The Infographic follows:
According to the latest stats, Chinese ecommerce sales will top $457 billion in 2016, which is presently at $107.48 billion. The availability of shopping 24/7 makes ecommerce Chinese shoppers’ favorite.
The whole stats compiled and designed by ‘Go Globe’ are listed below. Please click on the image to see the enlarged version.
Ecommerce sales surpassed $1 trillion in 2012 for the first time in its history. According to e-Marketer, who released a report on the ecommerce sales in 2012, attributed this to the growth of ecommerce in North America and Asia-Pacific. North America’s ecommerce sales reached at $365 billion, 13.9% Year-on-Year (YoY) change and Asia-Pacific’s sales has grown a phenomenal 33% to reach $332 billion.
eMarketer predicts that the Asia-Pacific region will continue its surge and will reach $433 billion in 2013(40% growth), surpassing North America while the latter’s(North America) ecommerce sales will see a meager growth of 12.2% to reach $409 billion. Read more
Marks and Spencer (LON:MKS) might have 12 brick-and-mortar stores in five Chinese cities already, but it’s surprisingly only this week that the UK retailer is sorting out its e-commerce strategy in the country. The fashion-oriented chain has just launched a Chinese version of its homepage along with a virtual store-front on Tmall, the nation’s largest online mall.
Realistically, it’s the Marks and Spencer Tmall store (see it here) that’s far more important and will see much more traffic. Alibaba-owned Tmall dominates the B2C e-tailing sector in China, and is home to store-fronts from lots of global and Chinese brands. This e-commerce effort also opens up the whole of China to the British company, as most of its physical stores are centered on the usual eastern China hub around Shanghai. Read more
E-commerce might be one of the most eye-catching trades in 2012 with all the price wars, spars, and series of good or not-so-good rumors, and it’s evident that in the coming year the industry would be a good play, as long as you placed the right bet. In an aim to help you capture a whiff of the market in next year, Chinese portal site Tencent made some predictions about the market listed below:
Mergers & Acquisitions
In 2013, vast expansion will be the major theme for Chinese etailers, coupled with many mergers and acquisitions. The relationship among companies is likely to be ‘me in you and you in me’, forming a more complex structure as verticals (OKbuy.com) or even B2Cs (Dangdang.com) are moving to other bigger platforms like TMall or Tencent’s B2C site.
Nowadays e-commerce has been an important channel of merchandise circulation, but many problems remain unsolved, including tax, license, fake products and so on. The industry has already drawn much attention from the government in 2012, and the corresponding policies are around the corner in 2013. Stricter oversight will be arriving sooner or later in the new year. Read more
Chinese e-commerce giant Alibaba sold one trillion RMB worth of goods in 2012, the company announced today. That’s $157 billion U.S. in gross merchandise volume (GMV), which easily surpasses U.S e-commerce giants Amazon and eBay combined.
In fact, Alibaba chairman Jack Ma said only two companies have ever recorded annual transaction volumes at this level: Wal-Mart and Alibaba.
Alibaba — which recorded $3 billion in sales in a single day earlier this year — is a conglomerate primarily composed of Tmall, which manages e-commerce operations for thousands of companies in China, and Taobao Marketplace, a rough equivalent of eBay. All payments are handled by Alipay, the company’s own payments processor, and Alipay has over 700 million registered users — with credit card information.
The company has grown massively in the past four years as the Chinese middle class increases in size and wealth, and as it has become a hub for a massive share of Chinese e-commerce. E-commerce has been growing at 60 percent year-over-year in 2012 in China’s third and fourth-tier cities, the company says, and currently just over five percent of all Chinese retail spending – RMB 18.39 trillion — passes through Alibaba websites. Read more
New research has suggested that a colossal 220 million people are now buying things online in China.
With the country fast growing into an economic powerhouse, this comes as little surprise – with eMarketer’s research showing the enormous figure dwarfed the 150 million online buyers in America.
According to their research paper “China Ecommerce: A Developing Marker Begins to Boom”, by 2016 423.4 million Chinese people over the age of 14 will be using the internet to do shopping online at least once a year.
This growth is also expected to be reflected in the business to consumer ecommerce sales the country makes, with a rise to almost $107.5 billion expected this year.
This is a huge amount which is 94.1% higher than recorded last year, and one that could see the Chinese ecommerce market rapidly overtake the Japanese market and even possibly dislodge the UK as number two in the world by 2013. However experts predict this spurt of growth will slow down by 2016 to around 22.8%.
At present China is currently ranked fourth globally in regards to ecommerce sales. Read more
Online retailers in China are fostering the industry’s development through ramping up their focus on Singles Day, an event increasingly fulfilling the same role as Cyber Monday in the US.
Singles Day started as an alternative to Valentine’s Day in the 1990s, with unattached students buying gifts for their friends without partners. November 11 was the chosen date as it numerically reads 11.11.
This occasion has since grown into a broad equivalent of “Cyber Monday” in the US, the day after the weekend of Thanksgiving when ecommerce companies regularly run deals and discounts.
Alibaba, which owns Taobao and Tmall, two leading online retail hubs, secured RMB19.1bn ($3bn) in revenues during this 24-hour period, over three times the RMB5.2bn generated last year. Read more
China’s biggest online retailer 360buy.com will start selling directly to overseas buyers on Thursday, the first such move by a major Chinese e-commerce firm, as it struggles with increasing competition at home.
Its move into the global market, where it wants to take on Amazon.com Inc, will be closely watched by other Chinese e-commerce companies.
An August price war between 360buy, Suning Appliance, and GOME Electrical Appliances Holding, now under investigation by the government, is also pushing the firm to seek new business outside China.
The privately-owned firm’s English-language website, en.360buy.com, will open for trade with almost 400,000 new products for sale, from electronic appliances to baby milk powder. It will deliver some of those free of charge, a company official said, confirming a report in the China Daily newspaper. The firm will ship to 36 countries, the official added. Read more