Mon, May 30, 2011 - Page 11 News List

E-commerce giant unveils showroom

TOUCHY FEELY:Taobao’s showroom displays home furnishings, allowing customers to touch and feel products rather than just looking at them on screens

AP, BEIJING

China’s e-commerce giant is stepping up its heated rivalry with bricks-and-mortar retailers with the launch of a five-story home furnishings showroom in Beijing.

Alibaba Group’s (阿里巴巴) Taobao (淘寶), an Internet platform through which an estimated 3 percent of all retail sales in China pass, opened the showroom on Friday for customers to try out sofas, tables and other big-ticket items before placing an order online with one of its merchants.

The mall is a new intrusion into the territory of China’s real-world retailers by e-commerce rivals that are growing so fast some suggest they could become the country’s leading retail force — its version of Wal Mart.

“The dominant retailer in China someday may be an online retailer,” Morgan Stanley analyst Richard Ji (季衛東) said.

Taobao says its Beijing mall is aimed at overcoming a hurdle hampering the growth of China’s Internet commerce even though online retailers offer significantly lower prices: Customers don’t like to buy furniture and other major items without examining them in person.

“It’s hard for people to shop for home furnishings if they haven’t seen them,” said Justine Chao, an Alibaba spokeswoman.

Global e-commerce outfits have struggled to gain a foothold in China in the face of aggressive local competition. EBay Inc entered China by acquiring a local company, but handed over control to Chinese managers. Amazon.com operates through a local partner, Joyo.

Industry analysts expect China’s online commerce to grow at explosive annual rates of 30 percent to 40 percent in coming years, defying early fears it might be hurt by low rates of credit card use and rudimentary delivery services.

A key part of e-commerce’s appeal is lower prices in a society where many families get by on a few thousand US dollars a year. With no need for an expensive chain of storefronts, Web merchants charge 30 percent to 50 percent less than traditional retailers.

On opening day on Friday, shoppers at the Taobao Mall on the Chinese capital’s east side were -test-sitting sofas and flipping through channels on big-screen TVs.

“Compared with photos on the Web, I can really touch the things, so I can put more trust in them,” said Yu Jingyuan, an -engineer for a computer company who was looking at a stall displaying kitchenware. “I can trust the sellers online.”

Taobao says it has no plans to open showrooms to display other goods, but the manager of its new Beijing mall had a warning for rivals.

“In the online world,” Taobao Mall head Ye Peng (葉朋) said, “nothing is impossible.”

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