Alibaba Group's plans to revolutionize China's retail industry, investing $16 billion in logistics and support by 2020, will open up China's vast interior and bring access to hundreds of millions of potential new customers, Reuters reported.
With an extra $15 billion in cash from a likely initial public offering, Alibaba and partners such as delivery service firms and life insurers will revamp China's fragile supply chains and build big new data centers to process consumer information.
Analysts predict e-commerce will account for a fifth of total retail sales in China within five years, up from just 6 percent last year.
Companies such as GOME Electrical Appliances, Haier Electronics Group Co. and Chow Tai Fook Jewellery Group have branched into e-commerce, riding Alibaba's coattails and reaping the rewards with their own online stalls on Alibaba's websites.
Alibaba CEO Jonathan Lu says his company expects to nearly triple the volume of transactions on its marketplaces to about 3 trillion yuan ($490 billion) by 2016, overtaking Wal-Mart Stores Inc. as the world's biggest retail network.
And the message to retailers from the group's sprawling campus headquarters in Hangzhou, less than an hour's train ride southwest of Shanghai, is simple: adapt or die.