Recruiting in China

During a meeting with China's premier, Li Keqiang, two weeks ago, Alibaba's founder and chairman Jack Ma made a bold prediction: "We expect 30-billion-yuan-plus (US$4.9 billion) in online turnover on Nov. 11."

Taobao.com and Tmall.com, key sales platforms under the Alibaba Group, operator of China's biggest e-commerce platforms, offered big discounts throughout Monday, or Singles' Day.

By 1:04pm, after 13 hours of sales, turnover stood at 19.1 billion yuan (US$3.1 billion). The amount was the same for the whole of Singles Day last year.

By 9:19pm, turnover exceeded 30 billion yuan, Ma's stated goal.

"Many products sold out in a flash," said Xu Yun, 24, who stayed up till 3am and spent 2,800 yuan (US$460) on clothes and cosmetics, at a discount of 50%. "I have bought enough for the upcoming winter," Xu said.

Sales surpassed 100 million yuan (US$16.4 million) less than a minute after the sale started at midnight. More than 10 million people like Xu were waiting to start shopping.

Singles' Day, on Nov. 11, became popular after Alibaba tagged it China's version to Cyber Monday.

"Under the surface of buying products at a lower price, the public are actually enjoying the benefits brought by market-oriented progresses in logistics, financial environment and e-commerce," said Ma.

Alibaba saw a whopping 1 trillion yuan (US$164 billion) in turnover last year, more than eBay and Amazon combined.

In 2012, China's online retail sales volume reached 1.3 trillion yuan (US$213 billion). It took only nine months for the country's online shops to break the record this year. China is poised to surpass the US to become the world's largest e-commerce market.

Consumption gained momentum after new guidelines in mid-August. Internet-based consumption is expected to grow at least 30% annually to 2.4 trillion yuan (US$394 billion) by the end of 2015.

This year, shoppers have been attracted by online-to-offline (O2O). Shopping malls have been working with e-commerce giants to allow customers to try products in real stores and then purchase them online, offering a more streamlined shopping experience.

Consumption is expected to grow faster as China will soon issue the fourth generation network mobile communications and technology (4G) license. This will make mobile Internet shopping even more convenient.

Behind the online shopping malls are over 5,000 Alibaba staff and hundreds of other workers in payment, telecommunication, internet maintenance and express service departments trying to provide a slick service.

According to Ma, about 9 million online shops have set up business on their platforms. This has led to thousands of jobs as well as a boost for logistics and express delivery companies.

In late October, China's Cabinet relaxed company registration requirements to ease market access and encourage social investment, giving support to small businesses like those on Alibaba's e-commerce platforms.

Premier Li expressed support for the country's burgeoning private enterprises and advocated reforms for a consumption-driven new economy during a conference, which Ma was invited to late last month.

"It is not only that the government trusts private entrepreneurs, it also relies on them," Li said.

However, it is not only down to trust.

The thriving e-commerce business is made possible by more Internet finance innovations such as third party payment platforms and small loans.

Thanks to increased investment borrowed from renrendai.com, a peer-to-peer (P2P) online lending platform, Yang Zhiming, a razor retailer on Taobao.com, doubled his sales on Monday.

Yang is one of the thousands of small business owners who has benefited from Internet-based micro finance. They had been turned away by major banks due to small scale and insufficient credit record.

More private enterprises are making their foray into the once heavily regulated financial sector, offering small and medium enterprises more financing choices.

"The internet finance boom forced China's state-owned finance giants to rethink their development strategy, putting more focus on small businesses and enhancing the country's credit system construction," said Yang Tao, a senior finance researcher with Chinese Academy of Social Sciences.

Xu Yun said she is looking forward to receiving her products, but is worried how long they will take to arrive and whether they will be in tact.

Last year, an avalanche of deals and parcels almost paralyzed the payment system and logistics, while customer complaints challenged the consumer protection legal system.

"China's logistics sector is small in scale and too fragmented," said He Dengcai, deputy director of China Federation of Logistics and Purchasing.

He encouraged more enterprises to outsource their logistics demands to help reduce costs and improve services.

Online payment services are also reported to falter when there are high numbers of transactions. "More payment channels and a safer purchasing system should be developed to ease online shopping," said Yang Tao.

That may be changing.

Premier Li has said the government will continue to improve public service infrastructures and systems to facilitate market-oriented reform.

"The process of reform may be gradual, but it is determined," he said.