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Chinese online giants expand into Europe

In 2025, Alibaba and JD.com will be making sales of EUR 10 bn in Europe alone.

In 2025, Alibaba and JD.com will be making sales of EUR 10 bn in Europe alone.

The Chinese giants in online trade are preparing a massive expansion into Europe. This is what the strategy consulting firm Oliver Wyman is warning about. According to the forecast, in 2025 these companies will be making sales of EUR 10 bn in Europe alone and EUR 553 bn overall. Taking Germany as an example, they state: JD.com and Alibaba will then generate more sales than the ten largest German trading groups together.

In 2017 this was EUR 380 bn. This is significantly more than the totalled sales of the top 10 in Great Britain to the amount of EUR 179 bn or in China at EUR 137 bn.

However the growth of the new Chinese competition is enormous. While JD.com and Alibaba made EUR 7 bn in 2012, this amount was already almost ten times as much in 2017 (EUR 68 bn).

The reason is seen to be the very high speed with which innovations are implemented, especially when also compared with Amazon. Checkout-free shopping, mobile phone payment and in-store ordering of immediate home delivery via apps, all already count as standard repertoire of the Chinese online retail giants, according to the latest edition of the Retail Journal by Oliver Wyman. While trade is following every one of Amazon's steps in the west, the greatest wave of innovations are coming from the east, according to the consultants.

Only recently they reported that JD.com had announced that they wanted to stand up to Amazon in Europe and were investing an initial EUR 1 bn in the construction of a logistics network in France. According to this information, Alibaba wants to invest more than EUR 13 bn over the next five years in global expansion and, among other things, in a central dispatch centre in Bulgaria, which can serve the entire European market.

| 5 April 2018


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