Financial Highlights

• Revenue: Reached RMB236.5 billion (USD33.7 billion), marking a 5% year-over-year increase.
• Net Income: Surged 63% year-over-year to RMB43.5 billion (USD6.2 billion), driven by equity investment gains and operational efficiency improvements.
• Adjusted EBITA: Decreased 5% year-over-year to RMB40.6 billion (USD5.8 billion), reflecting Alibaba’s strategic investments in e-commerce and technology.
• Free Cash Flow: Declined 70% to RMB13.7 billion (USD1.96 billion), attributed to increased investments in cloud infrastructure and strategic refunds to merchants.

E-Commerce Growth: Strengthening Core Operations

The Taobao and Tmall Group remained central to Alibaba’s business:

• Revenue: Grew modestly to RMB93 billion (USD13.3 billion), supported by double-digit order growth and increased customer management service revenues.
• 88VIP Membership: Increased by double digits to 46 million, underscoring its role in driving loyalty and higher purchase frequencies.

Strategic changes, including the elimination of Tmall’s annual service fees and the introduction of transaction-based software service fees, were pivotal in enhancing the platform’s competitive edge.

Read more on Double 11 performance, China’s largest annual shopping festival.

Cloud Intelligence Group: AI-Driven Expansion

• Revenue: Grew 7% year-over-year to RMB29.6 billion (USD4.2 billion).
• AI Leadership: Achieved triple-digit growth in AI-related revenues for the fifth consecutive quarter. The Qwen large model family, including its open-source Qwen 2.5 series, positioned Alibaba as a leader in China’s public cloud and AI infrastructure sectors.
• Operational Enhancements: Introduced cost-efficient AI services and upgraded infrastructure to support scalability and performance.

Global Commerce Expansion

The Alibaba International Digital Commerce Group achieved a robust 29% revenue increase year-over-year to RMB31.7 billion (USD4.5 billion):

• AliExpress and Trendyol: Continued to gain traction in Europe and the Gulf region, leveraging local inventory and cross-border logistics efficiencies.
• Cross-Border Focus: The AliExpressDirect model improved fulfillment speeds and customer satisfaction, strengthening its competitive positioning.

Cainiao Logistics and Local Services Growth

Cainiao Smart Logistics Network delivered 8% revenue growth to RMB24.6 billion (USD3.5 billion), supported by enhanced cross-border fulfillment capabilities.

Local Services Group reported:

• Revenue: Increased by 14% to RMB17.7 billion (USD2.5 billion).
• Operational Efficiency: Losses narrowed significantly, benefiting from scaled operations and marketing service growth.

Strategic Share Repurchase Program

Alibaba repurchased shares worth USD4.1 billion during the quarter, reducing its outstanding shares by 2.1% since June 2024. This initiative reflects Alibaba’s commitment to shareholder value, with USD22 billion remaining in its repurchase authorization through March 2027.

Alibaba Group highlights for Q2 2024

Alibaba Group released its financial results for the quarter ending June 30, 2024, showcasing both growth in strategic areas and challenges in maintaining profitability. The company continues to focus on its core businesses, particularly cloud computing and international expansion, while navigating a complex economic landscape.

Business Overview

Cloud Intelligence Group Sees Strategic Expansion Alibaba’s Cloud Intelligence Group reported notable year-on-year growth, driven by increasing demand for cloud services across sectors such as finance, retail, and logistics.

The expansion of AI-powered solutions and cloud infrastructure remains a cornerstone of Alibaba’s strategy to diversify its revenue streams and position itself as a leader in the global cloud market.

The international digital commerce segment recorded solid performance, underpinned by Alibaba’s strategic investments in key markets.

The company’s international operations, including platforms like Lazada and AliExpress, demonstrated strong user growth and increased transaction volumes, particularly in Southeast Asia and Europe. These regions are becoming increasingly significant as Alibaba seeks to reduce its reliance on the domestic Chinese market.

During the quarter, Alibaba continued to invest heavily in technological innovation, focusing on enhancing its AI, machine learning, and data analytics capabilities.

These investments are aimed at driving long-term growth and improving operational efficiency across all business units. Additionally, Alibaba’s commitment to building a robust technological infrastructure reflects its strategy to maintain a competitive edge in the rapidly evolving digital economy.

Financial Highlights

In the June quarter of 2024, Alibaba Group reported a revenue of RMB243.2 billion, a 4% year-on-year increase. While this growth reflects the company’s strong positioning in cloud computing and international commerce, the overall revenue expansion was moderate, indicating potential challenges in its core domestic market.

Net income for the quarter declined to RMB34.3 billion, reflecting a significant impact from increased spending on technology development and international market expansion. This decline suggests that while Alibaba invests for future growth, these investments weigh on current profitability.

Alibaba’s adjusted EBITDA stood at RMB52.8 billion, showing resilience in operational efficiency despite broader market challenges. Free cash flow was robust at RMB31.9 billion, underscoring the company’s strong cash-generating ability and providing a buffer for continued investment in growth initiatives.

Alibaba’s Strategic Investments Yield Mixed Results in Q1 2024

Alibaba Group Holding Limited reported a robust performance for the quarter ending March 31, 2024, showcasing a strategic rebound and growth across its diverse business segments.

The e-commerce giant’s focus on enhancing customer experience and strategic investments has resulted in notable year-over-year growth, despite challenging market conditions.

Strategic Initiatives and Business Review

Alibaba’s strategic initiatives have significantly impacted key sectors, including e-commerce, cloud computing, digital media, and logistics. The company’s focus on improving user experience, technological advancements, and expanding international commerce has paid off.

• E-commerce: Alibaba’s Taobao and Tmall Group saw a 4% year-over-year revenue growth, reaching RMB 93.2 billion, driven by a 5% increase in customer management revenue. The group also reported double-digit growth in online GMV and orders.
• Cloud Computing: The Cloud Intelligence Group reported a 3% revenue increase, reaching RMB 25.6 billion, with a notable 45% rise in adjusted EBITA. This growth was driven by higher adoption of public cloud services and AI products.
• International Commerce: The Alibaba International Digital Commerce Group experienced a 45% revenue increase to RMB 27.4 billion, thanks to strong performance in cross-border e-commerce, particularly from AliExpress.
• Logistics: Cainiao Smart Logistics Network’s revenue surged by 30% to RMB 24.6 billion, primarily due to increased demand for cross-border fulfillment services.
• Local Services Group: Reported a 19% revenue increase to RMB 14.6 billion, driven by Ele.me and Amap’s strong order growth.
• Digital Media and Entertainment Group: Revenue slightly decreased by 1% to RMB 4.9 billion, despite growth in Alibaba Pictures and Damai.

Financial Highlights

Alibaba’s financial results for the March quarter demonstrated resilience and strategic growth:

• Revenue: The company reported a 7% year-over-year increase in revenue, totaling RMB 221.9 billion (US$30.7 billion).
• Income from Operations: Despite a 3% decline, income from operations stood at RMB 14.8 billion (US$2.0 billion).
• Net Income: Net income attributable to ordinary shareholders decreased by 96% to RMB 919 million (US$127 million), mainly due to investment losses.
• Adjusted EBITA: Non-GAAP adjusted EBITA decreased by 5% to RMB 24.4 billion (US$3.3 billion).
• Share Repurchases and Dividends: Alibaba repurchased US$12.5 billion worth of shares in fiscal 2024 and announced a US$4.0 billion dividend.

Alibaba’s Q1 2024 results highlight the success of its strategic initiatives and investments in enhancing customer experience and technological infrastructure. The company’s focus on e-commerce, cloud computing, and international expansion positions it well for future growth. As Alibaba continues to innovate and adapt, it remains committed to delivering value to shareholders and capturing new market opportunities.

JD’s B2B platform Joybuy will mainly serve overseas buyers including e-commerce marketplace sellers, DTC sellers, and small and medium-sized retailers.

In the past year, JD Logistics has opened new warehouses in countries including Malaysia, the US, Australia, and the Netherlands, bringing the total number of bonded and overseas warehouses to about 80, and its global supply chain network to nearly 230 countries and regions.

Joybuy is now open to more than 110 countries and regions with a focus on Southeast Asian (SEA) and North American markets.

In SEA, JOYBUY has reached cooperation with Flash Express, a one-stop e-commerce service provider to develop the local market. It has also built up a partnership with Ginee, a SEA one-stop solution service provider for online businesses to better serve local buyers.

Joybuy currently supports multiple payment methods across the global, including:

• Credit card/ debit card
• Paypal
• Payoneer
• T/T
• Giropay
• Sofort
• EPS
• iDeal
• Yandex
• Banrisul
• Bradesco
• Banco do Brasil
• Itaú
• SPEI
• Boleto
• OXXO
• Afterpay

And, it currently supports 12 payment currencies: USD, EUR, RUB, GBP, CAD, CHF, AUD, PLN, MXN, BRL, KRW, JPY.

Joybuy promotes Quality Sellers who are recognized by the platform. There are two types of Quality Sellers: the Black J Seller and the Platinum J Seller.

• Black J Seller is a seller who is recognized by the Joybuy platform and is able to provide high-quality services and high-quality products
• Platinum J Seller is a seller who is recognized by the Joybuy platform and is able to provide good services and high-quality products

China cross-border B2B e-commerce markets insights 2021-2025

The acquisition gives JD access to VIPMRO’s over 100,000 offline retail stores.

MRO business covers over 10 million SKUs, many of which are long-tail and non-standard items. Through the strategic investment in VIPMRO, JD is able to speed up its development in the MRO industry while satisfying increasing demands from clients.

VIPMRO will be positioned as a sub-brand of JD MRO and provide its services to offline retail stores. Connecting with manufacturers will help JD build an even more comprehensive and smarter supply chain for MRO products.

In addition, through “Partner Store” plan, JD MRO will provide digital solutions for offline stores in the areas of product selection, transportation and delivery, installation and more, to improve their operation efficiency.

About VIPMRO

Within a few months after its launch in 2014, VIPMRO.com has successively reached strategic cooperation with dozens of well-known enterprises including ABB, Omron, Schneider and other global companies, becoming the first e-commerce platform for several industry-leading brands to cooperate in China, opening up a precedent for B2B e-commerce platform in the electrical field.

China B2B market status 2020; e-commerce revenue up 20%

SME B2B e-commerce market totaled 23.6 billion yuan in 2016, representing close to half of total e-commerce market in China. Alibaba has close to 50% market share in 2016.

SME B2B e-commerce market is estimated to reach 37.1 billion yuan while the overall e-commerce market will reach 32.7 billion yuan in 2019.

Also read: China Online Shopping Market 2016 and Forecast 2017-2019

China FMCG online B2B market, targeting traditional trade retail stores, will grow to 330 billion yuan (US$48 bn) in 2018 from 40 billion yuan in 2016 according to Kantar Retail.

The five major FMCG B2B players in China include Huimin.cn, JD.com Xintonglu, Jinghuobao, Lingshoutong and ZhangHeTianXia.

Most brand manufacturers in China have focused their business on modern trade and e-commerce; but, traditional trade is still the biggest channel of China’s retail market. Traditional trade provides a place for residents to socialize since most customers are regular and familiar with each other in the community.

Highly fragmented FMCG traditional trade comprises nearly 7 million local stores across all city tiers.

Nearly 55% of the manufacturers has more than 200 distributors to operate traditional trade.

FMCG B2B companies in China grow rapidly with capital support. However, the industry is still at its beginning:

Total revenues of China’s SME B2B e-commerce market reached RMB 5.79 billion (USD 870 million) in Q2 2016, an increase of 14.4% YoY or 6.8% QoQ according to iResearch.

Alibaba continues to dominate China’s SME B2B e-commerce market with 46.6% market share, followed by Global Sources with 7.3% market share.

China B2B e-commerce market reached 5.48 billion yuan in Q1 2015 and 6.39 billion yuan in Q4 2015 according to Analysis.

A quick overview on China’s overall economy in the past year:

China PPI decreased by 5.9%year-on-year in 2015.

The manufacture accounted for 76.8% of total industrial output value in 2014.

China B2B Market Overview

China B2B e-commerce had attracted investment of over 5 billion yuan in 2015 with a year-on-year increase of 699%. The total rounds of investment reached 103 in 2015, comparing with only 24 rounds in 2014.

Agriculture segment accounted for 28% of total B2B investment received in 2015.

The transaction of China B2B e-commerce market reached 11.8 trillion yuan in 2015 and is estimated to reach 18.5 trillion yuan in 2018 with stable growth. China e-commerce market reached 15 trillion yuan in 2015 and 69% came from the B2B market according to Alibaba.

Small and medium size enterprises (SME) is the biggest part of China e-commerce market, followed by designated sized enterprises (27.9%) and online shopping (23.1%) .

The transaction of SME in 2015 was 7.2 trillion yuan with 17.1% year-on-year growth.

The SME B2B e-commerce down to 61% in 2015 and is predicted to maintain decreasing, while above designated size enterprises B2B e-commerce increased to 39.8% in 2015 and is predicted to keep a steady growth in the next few years.

Overseas new users increased rapidly on Alibaba.com in 2015, particularly in Europe, America, and the Middle East. Domestic merchants on 1688.com spent much time online and CXT users spent 47 hours on average in receiving their first orders in 2015 according to Alibaba. Alibaba is predicted to keep growth in sales and users in 2016. Read more from Alibaba research here.

Tencent officially launched Enterprise WeChat/Weixin this morning, positions as a tool for office communications and collaborations.

Enterprise WeChat, still under internal testing last month, currently supports iOS, Android, Mac, and Windows PCs.

Tencent developed communications software for enterprises back in 2003 called RTX, and Enterprise WeChat is being developed based on RTX and mainly for companies’ internal communications. The main features of Enterprise WeChat include:

• Enterprise contacts import and management
• Enterprise communications with phone and email integrated
• Encryptions

Enterprise WeChat is considered a competing product with Alibaba’s enterprise messaging app DingTalk which is a more mature office tool. Users of Tencent’s Enterprise Mail and WeChat Enterprise Accounts can import their contacts directly to Enterprise WeChat.

Enterprise WeChat currently supports registrations from enteprises, government agencies, and registered organizations. Tencent launched WeChat Enterprise Account in 2014 which is built on WeChat/Weixin. Enterprise WeChat is a new application/product targeting enterprises.

Read more: The Value of WeChat Official Accounts and check out Top 6 China Mobile Social Networking Apps

The total revenues of China B2B e-commerce market reached 6.39 billion yuan in Q4 2015, an increase of 7.9% QoQ according to Analysis.

Alibaba remains the dominant player in China’s B2B e-commerce market with close to 40% market share by revenues, followed by Global Sources (5.45%) and HC360 (3.92%).

Overseas new users increased rapidly on Alibaba.com in 2015, particularly in Europe, America, and the Middle East. Domestic merchants on 1688.com spent much time online and CXT users spent 47 hours on average in receiving their first orders in 2015 according to Alibaba. Alibaba is predicted to keep growth in sales and users in 2016.

Read more on China B2B Market Insights 2016

Overseas new users increased rapidly on Alibaba.com in 2015, particularly in Europe, America, and the Middle East. Domestic merchants on 1688.com spent much time online and CXT users spent 47 hours on average in receiving their first orders in 2015 according to Alibaba. Alibaba is predicted to keep growth in sales and users in 2016.

China e-commerce market reached 15 trillion yuan (US$2.3 trillion) in 2015 and 69% came from the B2B market. The ratio was four percentage points lower compared with 2014. As one of the leading global and domestic B2B platform, Alibaba delivered a good answer in 2015.

Alibaba.com had 1 million domestic suppliers and 250 thousand overseas suppliers. Among the 110 million buyers, over 100 million were overseas. Europe, North America, Central and North America had most buyers of Alibaba’s global B2B platform.

Alibaba.com which was the leading platform for global trade received most inquiries from America, UK, and India in 2015. America was the most important business partner of Alibaba.com in 2015.

Alibaba.com’ business developed quickly in Russia, US, and Brazil in 2015. The three countries gained most new users in the last year. Broadening e-business market and improving delivery service drove the growth.

New users in Kazakhstan, Ukraine, and Russia increased most quickly in 2015. New users in Europe increased by 104%, the ratio was 63% in Central and South America, 50% in Middle East, 47% in North America, and 36% in Asia. Asia and North America were the engines of Alibaba Global website’s business.

Middle East was a new emerging market of Alibaba.com in 2015. New users in Turkey, Ukraine, and Pakistan increased quickly which were the driving force of Alibaba’s business in the Middle East regions.

More users were used to shop through smartphones and tablets. China m-commerce retail market was predicted to reach US$334.0 billion in 2015. About 40% overseas users purchased on Alibaba.com through mobile devices in 2015.

1688.com, Alibaba’s domestic B2B platform, aimed to help small and medium companies do business in China. China’s small and medium corporate buyers shopped more frequently on 1688.com in 2015.

China online buyers shopped more online instead of offline shops in 2015 and over 20% were newly created demands. The number of goods shoppers bought online increased largely in 2015.

China’s online shoppers tended to pay more attention to quality rather than price and customized or processed products encountered larger demands in 2015. Users were more willing to spend money on middle and high end goods with kitchen wares as example. Price was not the only factor to attract China’s online shoppers and companies should manage to deliver quality products to the market to gain competitiveness.

More 1688.com users finished their initial order through mobile devices in China. Online shopping platforms were and should be devoted to supply better mobile user experience to improve sales.

1688.com promoted CXT service to help small and medium companies have more exposures by utilizing special marketing tools. 54.9% CXT members logged in for over eight hours every day in 2015. The ratio was 18.9 percentage points higher than 2014.

CXT users spent 47 hours on average in receiving their first order in 2015 which was less than half of 2014. New merchants could also have many opportunities on the platform.

China central and western suppliers increased quickly on 1688.com. Tier-2 and below cities and rural regions were strategically important region for 168.com and Alibaba. Alibaba has invested in domestic delivery service in less developed cities and promoted China Spring Festival Shopping Fair to boost B2B business in rural regions.

Alibaba reported revenues of 22,171 million yuan (US$3,488 million) in Q3 2015, 20,245 million yuan (US$3,265 million) in Q2 2015, and 17,425 million yuan (US$2,811 million) in Q1 2105. With exploring overseas market and domestic rural market, Alibaba is predicted to keep promising in 2016.

Also read: China Online Luxury Shoppers Insights in 2015

China e-commerce market is expected to reach 16.2 trillion yuan (US$2.53 trillion) in 2015, of which business online purchase will account for about 80% or 12.9 trillion yuan (US$2.01 trillion) according to CCID Consulting.  Jingdong had 39.4% market share of self-serving business purchase vertical in the first half of 2015.

Shopping online could save a large amount of costs for companies on office supplies such as printers, computers, desks and others especially large office appliances. The large demand of office supplies and the need of cost saving drive China’s company online shopping market in large scale. China’s enterprise online shopping market is expected to reach 12.9 trillion yuan (US$2.01 trillion), accounting for 80% of the e-commerce market in 2015 with an increase of 27.2% YoY.

China’s enterprise online purchase market has entered the fast-growing period since 2010. As the government has introduced a series of policies to encourage and support the e-business, e-commerce related facilities have gradually improved and companies’ awareness and utilization of e-commerce have accelerated in recent years, China’s company online purchase market will increase with an average annual growth rate of 30% in the next three years, higher than the overall growth rate of China’s e-commerce market.

As China’s mobile internet, mobile payment, and social media continuously develope and improve, business online purchase will become more reliable on mobile. Besides, corporate procurement standards and processes have gradually become standardized and transparent that China’s company online purchase market will usher in more development opportunities as well as challenges.

Jingdong (39.4%) led China’s self-operating enterprise online purchase platforms in H1 2015, followed by Alibaba (18.1%) and Suning (10.9%). Amazon China, Gome, Yihaodian, Dangdang and so on are also popular online platforms for company online purchase.

Computers accounted for 39.3% of goods companies purchased online in H1 2015; basic office supplies 22.7%, mobile communication devices 16.5%, digital products 8.4%, commercial electronic appliances 7.7%, networking equipment 3.4%, software and services 0.01%, and other 2.0%.

Also read: China Retail V.S. Online Shopping 2015

China’s top 4 B2C websites, JD, Jumei, Dangdang and Vipshop announced financial reports in Q2 2015, JD further inproved its business scale while suffering from greater losses. Jingdong lost over 1.8 billion yuan in the past year.

JD in Q2 2015 gained a revenue of 45.9 billion yuan (about US$7.4 billion), an increase of 61% year-over-year, mainly due to the increase of active users and orders; Vipshop totaled a net revenue of 9 billion (US$1.5 billion), 77.6% increase compared with 5.1 billion in the previous year; Jumei got a revenue of 1.963 billion yuan (US$308.1 million), 100% growth compared with US$154.4 million the same period last year; and Dangdang got a revenue of 2.312 billion yuan (US$373 million), a YoY increase of 29.8%, which was the slowest among the four companies.

Also read: China Mobile Shopping Market Value Exceeds RMB36 Bln in Q1 2015

China B2B e-commerce market reached RMB 5.48 billion (USD 883 million) in Q1 2015, an decrease of 1.6% QoQ according to Analysis International.

The first quarter of year normally sees slow growth in China B2B market considering the fiscal year cycle, enterprise purchase cycles, holidays and etc. In addition, China’s international trade market had some negative impact. The total value of China’s import and export trading was down by 6% QoQ in Q1 2015.

China’s international trading trade B2B platform completely enters a transaction era; and, the value of credit guarantee service entered the stage. Cross-channel collaborations have become new means for B2B e-commerce platforms to enhance the competitiveness.

Alibaba still dominates China’s B2B market by revenues with 44.13% market share, followed by HC360 (4.86%) and Global Sources (4.69%).

Also read: China Top 10 B2B Websites in Q4 2014

In Q4 2014, top 3 B2B websites by influence index were Alibaba, JQW.com and HC360.com with influence index of 92.435, 68.543 and 42.432 respectively. And the average influence index of top 10 B2B websites was 39.694 in Q4 2014 in China.

Since Alibaba’s IPO, it had been through rapid development in 2014 with its influence index – 92.435 which made it the top among B2B websites in China.

Also read: China Small & Medium Enterprises in B2B E-commerce Market Overview

Alibaba.com, Alibaba’s B2B international platform, has officially transformed into online trade platform, which will change the traditional trade model (online inquiry & offline payment).

Transformed into online trade platform, Alibaba.com can display transaction volume and guarantee value to customers to obtain trust to promote trade.

However, Alibaba.com do not open online trade service to all categories of products. It focuses on clothing, 3C digital accessories and so on, supported by payment methods of MasterCard, Visa, Maestro, Cheque, Western Union. It has also integrated Russian online payment tool WebMoney, Qiwi Wallet and Brazil’s Boleto.

One insider pointed out that Alibaba.com’s transformation is the biggest change within 15 years. For the reason that why Alibaba.com did not apply payment method of its own, the relevant people said, “bank payment is relatively mature in cross-border settlement and it can save cost.”

It is believed that domestic trade platform 1688.com has not realized online trade. With large demand of domestic trade, Alibaba will also integrate online payment for its domestic B2B platform.

Also read: Mobile 35.8% of Total Alibaba China Retail Business GMV in Q3 2014

In Q3 2014, total revenue of China small and medium enterprises in B2B e-commerce market was RMB4.96 billion ($810.7 million) with an increase of 14.9% year on year while it decreased by 9.3% quarter on quarter.

China’s economic downturn in Q3, decreasing transaction value of bulk commodities and decreasing import value all had great impact on China SMEs in B2B e-commerce market.

In Q3 2014, China’s eight key enterprises accounted for 67.6% of total revenue. Alibaba ranked top with market share of 38.5% followed by Mysteel.com and Global Sources.

Also read: China Online B2B E-commerce Market Overview in Q2 2014

1688.com, the largest online B2B website under Alibaba Group and sourcing destinations of many Taobao sellers, is opening up to foreign suppliers with the addition of twenty four South Korean brands through Alibaba’s Direct From Overseas Markets program.

1688 started accepting suppliers from outside mainland China since August 2014 when some wholesalers from Taiwan were accepted into the online B2B platform.

The acceptance of Korean suppliers on 1688.com were supported by South Korea’s Ministry of Agriculture and Food and Rural Affairs. Some of the well known brands are Woongjin Foods, brewer HITE-Jinro, and Daesang Corp.

1688.com is a Chinese online B2B website while its sister website Alibaba.com is an English one for global sourcing. According to 1688, a mini-site will be set up for Korean products by the end of this year. And, the next country under Direct From Overseas Markets program is Southeast Asian countries.

China B2B e-commerce market revenue exceeded RMB4.53 billion (US$740 million), an increase of 6.1% from the prior quarter in the same year and by 57.29% from prior year period according to the latest data from Enfodesk.

Check out China online B2B market share in Q2 2014 here.

Also read: China B2B Market Overview in 2013

China B2B e-commerce market revenue has exceeded RMB4.53 billion (US$740 million), an increase of 6.1% from the prior quarter in the same year and by 57.29% from prior year period according to the latest data from Enfodesk.

Alibaba still has the largest B2B market share of 44.82%, followed by HC360.com of 4.53% and Made-in-China.com of 3.21%.

There are several reasons China’s online B2B market saw growth in the second quarter. First, influenced by the impact of the macroeconomic environment, Chinese GDP grew slightly compared with the first quarter in 2014 and the international trade trend has transformed from negative to positive.

Secondly, purchasing habits of Chinese consumers are influence by the wave of e-commerce in China, and with increased trust to network with other businesses, some were trying to obtain business opportunities online.

Finally, with the increasing demand of online transactions among e-commerce businesses, the service on B2B platform continues to strengthen its capabilities. Dealing with business procurement, sales, logistics and other business processes with partners, this platform would provide efficient and accurate service.

Highlights of China Online B2B in Q2 2014

1. Traditional operation system is improving gradually, big data-based, value-added service increases vitality to the market. With the analysis of the suppliers’s data on the platform, the buyers can easily recognize them in the large market which increases the possibilities for the business.
2. Companies increase market credits and promote statues to strengthen their brands in the big data-based B2B market.
3. The next breakthrough on B2B market: payment security, control for certification and bank payment.

Alibaba vice president revealed in public early this year that Alibaba B2B platform 1688.com achieved daily transaction of 300 million yuan (USD 49.1 million). With the recovering global economy and support from the government agency for international trading, global B2B market is heading towards a promising future.

Read more: China Online B2B Market Update for 2013

China’s online B2B market reached 16.98 billion yuan with total transactions exceeding 7 trillion yuan.

Alibaba still dominates China’s online B2B market with about 46.4% market share (by revenue) according to research company Analysis International:

Why China B2B market increased  in 2013?

From a macro point of view: Firstly, the government’s encouragement and financial support secured a healthy development of B2B e-commerce. Secondly, although the international economy was in recovery, its influence was weaker than increasing domestic trade which favor B2B market. Lastly, the explosion of long tail market was coming and hitting B2B market.

From a micro point of view: More B2B enterprises used internet for marketing to expand influence. The mature of B2B business model and the demand of deepening service promoted the development and diversification of B2B enterprises. And the e-commerce safety certification system was improving, giving the market a confidence in B2B enterprises.

In 2013, enterprises were more creative. New business models, including operating model, profit model and service model,  kept springing up and maturing. EnfoDesk believed that the whole market would maintain a stable growth as B2B vertical service deepens and operating model diversifies.

Alibaba, Global Sources and HC360 ranked Top 3 of China B2B enterprises with market share of 46.4%, 8.2% and 4.4% respectively, according to EnfoDesk. The market pattern was quite steady in 2013; the market share of 9 core B2B enterprises totaled 70.3%.

EnfoDesk said that the market share of comprehensive e-commerce platforms would decrease while B2B would focus more on difference between industries.

Alibaba vice president revealed in public that Alibaba B2B platform 1688.com achieved daily transaction of 300 million yuan (USD 49.1 million) after a year’s transition to online wholesale transaction platform.

1688.com used to be an information platform, now it has been upgraded to a transaction platform within three years. In 2013, 1688.com integrated 1688 suppliers information in Taobao search, launched huopin (a wholesale group buy channel), taogongchang (an online manufacturing factories platform offering suppliers information for Taobao sellers ) and taohuoyuan (an online procurement platform specified for Taobao sellers). 1688 grew to the top choice of Taobao sellers for procurement.

In March 2013, 1688 daily transaction was around 30 million yuan (USD 4.91 million). By the end of 2013, it had increased tenfold. With the population of internet, online B2B grew rapidly in 2013. In the future, the challenge of online B2B lies in replacing the security of offline B2B transactions which is what Alibaba plans to solve.

Alibaba’s data showed that in the first half of 2013, Yiwu B2B online transaction reached 2.51 billion yuan (USD 410 million). It is expected to hit 5 billion yuan (USD 816 million) by the end of 2013.

Yiwu, a city in the central area of Zhejiang province in China, is one of the most active free trade markets and famous for its small commodity trade.

Yiwu B2B online transaction in 2012 was 2.24 billion yuan (USD 366 million). The exports of suppliers in Yiwu reached 48.75 billion yuan (USD 7.96 billion) in 2012.

Besides, Alibaba also announced that the number of domestic B2B members in Yiwu was 22,512, and foreign trade B2B members in Yiwu was around 3,000 which occupied 3.75% of total B2B members in China by June 30, 2013.

 China B2B market in the first half of 2013 reached 12.6 billion yuan (USD 2.06 billion), increasing 23.8% compared to 2012. The total market is expected to reach 29 billion yuan (USD 4.74 billion) by the end of 2013.

China B2B platforms are divided into two categories: B2B information platforms and B2B search engine platforms. B2B information platforms market scale in 2013 was estimated to reach 17.5 billion yuan (USD 2.86 billion), and B2B search engine platforms market scale was about to reach 11.5 billion yuan (USD 1.88 billion).

According to EnfoDesk, China B2B market scale in Q3 2013 reached 4.24 billion yuan (USD 692 million), with a QoQ increase of 7.8% and a YoY increase of 23.3%.

Alibaba, Global Sources and HC360 topped in China B2B platforms in Q3 2013. Alibaba led the B2B market with 46.6% share, and the top 9 enterprises occupied 69.2% of the total. Global Sources and HC 360 remained the second and third, but their market share decreased and gradually fell further behind Alibaba.

According to a research by ebrun.com, one of the biggest Chinese E-Commerce social media, 47.8% respondents said their websites net profit dropped in the first half of 2013, and websites with decrease of paid members occupied 52.1%.

52.1% respondents said revenue increased compared to last year in the first half of 2013, 30.4% said revenue dropped and 17.3% said revenue remained the same as last year; however, as for net profit, only 39.1%  reported an increase in the first half of 2013, 47.8% suffered decreasing net profit, 13% said net profit remained the same.

The main income of B2B websites comes from membership fee and advertising. with 56.5% and 69.5%. Besides, 30.4% respondents said commission gradually became one of the main sources. Other income sources include loans to wholesalers and value added services.

Another research discovered that the business model built on membership fee an advertising were facing challenges. 52.1% said membership fee dropped, and 43.4% said their membership fee increased. Reasons for the drop include: Wholesalers were unsatisfied with these B2B websites services; Alibaba, HC360 and Global Sources occupied a great part of market share (34.7%); Baidu and Google search engines “stole” a lot of customers.

In China, social marketing began in 2010, when Sina Weibo users hit 200 million. First, Sina Weibo platform had been developed for a while then, and a lot of enterprises were willing to enter the platform. Second, Sina Weibo opened its API (Application Program Interface) to third-parties, and they could develop Weibo apps.

As for B2B enterprises, they also need to communicate with its target customers, thus they will need social marketing to get to their audiences directly.

How to Target B2B Audiences On Weibo?

1.  The content produced on Weibo needs to be targeted to reach audiences. If a person re-post a post about your product, he or she could be the target user, and his or her followers could also be the target audience.
2. You could analyse the tags and social network behaviors to identify target audiences
3. Enterprises could hold large meetings to reach customers. Offline marketing is very targeted, but effective communication may hard to reach with crowds of thousands of participants.

   Under these circumstances, social marketing becomes very important. All people present could make contacts with your enterprise through Weibo, Wechat and other social media. A lot of interactions could happen on the meetings, such as vote, content downloading, lecturers information and even asking questions. These online communications would leave large effective customer data, you could keep on tracking and interacting after the meetings.

Core of Soical Marketing

The core values of social marketing are the management of process and data. Social data means nothing if you don’t analyse and make use of it. For example, if one of your Weibo post gets 10,000 reposts, you have to find out who are these people and communicate with them and make effective recommendations for them.

Social data has a few features:

1. People expose their data voluntarily all the time. They love to post about where they are and what they like. In the future, there are a lot to analyse, such as locations where they take photos, what kinds of photos they like, etc.
2. Network of users and actions. By analyzing data, we can get a social map of user behaviour. A user’s action is part of its social network. When we get the social network map, we would know more precisely the need of customers. It is yet to be developed.

Alibaba has connected its B2B platform 1688.com with its C2C platform Taobao. Last September, Alibaba integrated 1688 accounts with Taobao ones. Now, Alibaba integrated 1688 suppliers and wholesalers information in Taobao search results.

For example, if you search “steel” in Taobao, you can get 4 products displayed in the search results, with company name, location and price.

If you click on the search result, you will get to a new page linking to 1688.

If you search for a company name in Taobao, the company in 1688 will also appear in the results.

Click on the result, you will be linking to the company page in 1688.

1688.com, Alibaba’s domestic B2B platform in China, announced on September 5 2013, that the total amount of online transaction on September 4 2013 broke 4.19 billion yuan (USD 679 million). A new record in global B2B market.

On September 4, 2013, 230,000 sellers on 1688 made 2.52 million transactions, online transaction in single day mounted to 4.19 billion yuan(USD 679 million). Early this year, 1688 registered B2B members hit 100 million, doubled in 500 days. It was astonishing for the whole e-commerce market.

1688 Transition

Since its delist from Hong Kong main board, it was privatized by Alibaba Group. The delist aimed to relief the pressure of transition. Later, 1688 disappeared from public for a while, and focused on turning 1688 from an information platform to an online trading platform. From last year, 1688 targeted at increasing new members, improving member authenticity, increasing buyer traffic and user experience, then promoting online trade.

One month after delist, Alibaba Group adjusted its business structure to seven businesses. Alibaba’s B2B was separated to International Core Business Unit (ICBU) and China Business Unit (CBU), namely 1688. ICBU, CBU, Taobao, eTao, Tmall, Juhuasuan and Aliyuan are the seven businesses in Alibaba Group. Based on the seven businesses, Alibaba was going to build CBBS system, which is the integration of Consumers, Channel Businesses, Manufacturing Businesses, and E-Commerce Service Providers.

In Alibaba’s CBBS strategy, 1688 targets at small business and is connected to Taobao platform. The core businesses of 1688 are wholesale, sourcing and social network for members. Wholesale is mainly for big manufacturers to sell products to Taobao small channel businesses. Sourcing mainly focused on engineering procurement and central purchasing for enterprises. 1688 social network is for letting business members to know each other, and be friends with people in the same industries.

In 2013, the goal of the whole year is to achieve 100 billion yuan (USD 16.2 billion) transaction amount, and to be the number 3 in the online trading platform.

B2B + Taobao

Taobao is far more than an online retailing platform. Online retailing is only an isolated part of e-commerce, Alibaba is going to connect 1688 with Taobao, to form a supply chain of manufacturing businesses, channel business and consumers. E-Commerce service provider will combine them together.

In last September, after the integration of Alibaba accounts with Taobao accounts, 1688 transactions amount had an prominent outbreak. Taobao businesses are extremely familiar with online trading, naturally, they would choose 1688 wholesalers to be their suppliers. What’s more, they are very good at managing trading platform, their feedback for products would help suppliers to improve efficiency.

At present, about 50%-60% of 1688 transactions are from Taobao platform, the rest are from offline buyers which are mainly consisted of three and four tier cities enterprises.

Taobao platform will lead Alibaba to logistics, and 1688 will lead to up stream supply chain, such as materials and sourcing. On one hand, B2B platform has the best manufacturers and suppliers in China. On the other hand,1688’s transition from an information platform to a trading platform will help Alibaba reach downstream supply chain.

Driving Power of 1688’s Transition

Online B2B trading need becomes stronger day by day, enterprises gradually adapted and adopted online transaction. The average daily transaction amount in May was 150 million yuan(USD 24.3 million), now it has grown to 250 million yuan (USD 40.5 million).

Since 2008, foreign trading has been sluggish, however, domestic trading growth remains a fast speed. More and more enterprises were going to invest in B2B. This was driving power of 1688’s growth.

Sourcing cost used to be quite expensive, because the professional sourcing markets are limited to certain regions. Enterprises would purchase a large sum at a time, it led to slow cash flow and inventory risk. 1688 has the online trading advantages, it breaks geographical limitation and allows enterprises to lower sourcing cost.

At present, 500,000 suppliers from 140 sourcing markets have been on 1688. Taobao small businesses could purchase at a relatively small amount each time, they could timely adjust the purchasing amount according to market changes.

According to 52b2b.cn research,  the top 10 B2B platforms ranked by brand influence in Q2 2013 were: Alibaba B2B, HC, Global Sources, DHgate, Focus Technology (Made in China), 315.com, Shengyibaoku, Shanghai steel Union (My steel net), the global market, B2B.com and IBI.

Data showed that Alibaba B2B brand influence in Q2 was still the strongest. Alibaba’s revenue and site traffic ensured its prominent advantages lead; Other market players include HC, Global Resources DHGate and Focus Technology. Their influence index increased slightly compared with Q1 2013, partly due to their financial growth in Q2. 315.com, Shengyibaoku, My steel net, Global Market, B2B.com and IBI were small market players.

China SME B2B total revenue is 4.96 billion CNY in Q2 2013, which has a year-on-year growth of 19.2% and QoQ increase of 7.4% according to data from iResearch. Compared to Q1, the year-on-year growth in Q2 slowed down, but QoQ growth goes up a little.

Due to international market sluggish, China SME B2B growth slowed down. However, domestic demand was positive in Q2 which provided good opportunities for SME.

Statistics show that China SME market share by revenue situation hasn’t changed too much, with top 8 enterprises occupying 63.9% market share. Alibaba kept the lead with 42.9% in Q2, 1.2% higher than Q1 2013. Global Sources jumped to 7.5% and DHgate up slightly in Q2 this year.

Alibaba’s growth in market share is likely due to its increased number of members and the new P4P (pay for performance) model in its international version of website.

In the respect of the development of small and medium-sized B2B enterprises, the international need is declining and the growth of total revenue is slowing. However, with the trend of foreign trade market turning better and more and more beneficial policies releasing, China SME B2B business had a better quarter in Q1, 2013.

Local enterprises focus on adjustment of strategies, which seems to be the blasting fuse of the fierce competition in B2B market. Alibaba are still taking the leading position in spite of a slight decline in the market share. At the meantime, enterprises such as Mysteel, HC Network and DHgate have successfully stepped forward.

Some insiders predict that the competition in small and medium-sized B2B market will get more intense in the future.Alibaba international website is to push forward the free membership and its revenue will be based on P4P (Pay for performance). Besides, the entirely open foreign trade platform put forward by DHgate is bound to bring about a new round of revolution in B2B market.

According to Enfodesk, Alibaba led the B2B market with the 47.9% market share, followed by Global Sources and HC360 ,with market share of 10.6% and 4.0% respectively.

Eofodesk held a view that China’s B2B market is now in times of change, and every enterprise is going through the transformation according to their advantages and features.

According to the quarterly market monitor report for Q2 2012 by Enfodesk, China B2B operation revenue was 3.39 billion (USD 536 million). The quarter on quarter growth was 11.3% and the year-on-year growth was 13%.

Chinese macro-economy had nice growth in Q2 and the import and export trade brought great chances to B2B e-commerce. Based on the data by General Administration of Customs, the total transaction reached 98.06 billion yuan (USD 15.49 billion).

The business model of Chinese B2B industry has remained the same for a long time, which need innovation if expecting long-run development.