Chinese internet firm, Alibaba Group, will invest CNY2bn (USD291.6m) in its online auction house, Taobao, as the site tries to surpass Wal-Mart as the world’s largest retailer.
The investment, which will fund new technological innovations and expand the firm’s staff, more than doubles the CNY1.45bn (USD211.5m) invested by Alibaba in Taobao since the site launched in 2003.
“Wal-Mart needs to buy more market sites, equipment and warehousing if they want to win another 10,000 customers,” says the Alibaba’s chairman, Jack Ma, quoted by the People’s Daily Online. “But for Taobao, we only need to get several new network servers.”
Alibaba, which is 39% owned by Yahoo!, says items worth an aggregated CNY43.3bn (USD4.3bn) were exchanged on Taobao in 2007, an increase of more than 100% from the year before. Trading volume could reach an estimated CNY100bn (USD14.6bn) this year. In comparison, Wal-Mart had a global trading volume of USD5.1bn in 2007.