Saturday
November 8
2014

Scott Anderson

Weekly Roundup 11-8-14: Alibaba is now bigger than Walmart, but will it benefit the still unconnected masses

Chinese e-retailer Alibaba is a more valuable company than Wal-Mart, at least in terms of its market capitalization.

Let that sink in.

Some will dispute the actual market value of China’s biggest online retailer as being waaaay overstated given its recent IPO and subsequent stock surge, compared to the relatively steady and well-established Wal-Mart. And sure, they’d have a point. But here’s another point: Alibaba reported third quarter sales of $2.75 billion, up 54 percent from the previous year. And even more impressively, the company said it attracted 29 million new mobile users, reaching 217 million mobile customers in September. Mobile customers are now purchasing more than a third of the company’s total merchandise, or roughly double the volume of a year ago.

All of that commerce isn’t happening exclusively in China’s megacities, either, noted Panos Mourdoukoutas in a Forbes article last month. Mourdoukoutas said companies like Alibaba have been going deeper and further into rural, poorer areas of the country through e-tailing. He quotes a McKinsey study detailing the trend there:

“For these shoppers, the utility of online purchasing may be higher, since they now have access to products and brands previously not available to them, in locations where many retailers have yet to establish beachheads.”

As Mourdoukoutas points out, most of the world’s 4 billion people without connectivity are clustered in rural, low income, elderly, illiterate and female populations. But the mobile phone, and the increasingly competitively priced smartphone, could bridge many of those gaps at a scale unimaginable in a bricks and mortar era.

This demand could lead to an Internet unlike what we in the West have experienced up until now – one that is far more reflective of the real world. Google is charging ahead with the “Indian Language Internet Alliance” with a goal of getting 500 million more Indians online by delivering content in Hindi. Meanwhile, in coordination with nonprofit web browser company Mozilla, the mobile operators trade group GSMA this week published “Unlocking relevant Web content for the next 4 billion people.” Here’s the root of the problem as they see it:

In an article in Quartz, Leo Mirani provides more evidence on why the local language content push is such a big deal, for both consumers and the companies eager to reach and/or connect them.

“Today, some 80 percent of the web remains dominated by just 10 languages. If Facebook, Google and GSMA are serious about their professed goals to connect vast numbers of people to the internet (everyone in the case of Facebook and Google, another billion by 2020 in the case of GSMA), a good starting point is to give the speakers of the other 6,990 languages something to do when they come online.”

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Internet, technology, Weekly Roundup