Investment From Chinese Tencent Holdings Ltd. Of $1 Billion Highlights Diverse Needs of E-Commerce Platforms

By Webimax Company | May 29 2012 6:04 PM

Not every e-commerce platform is created equal. Like other industries, the business model of a company determines everything down the line from management and operations to product type and delivery. Companies within the e-commerce sector experience little difference in this regard. E-commerce encompasses businesses that sell online including the selling of both products and services, from traditional products that are usually sold off-line in stores to services that until now have been purchased over the phone or in-person, like travel ticketing and packages for example. Other platforms include the selling of information and access to data like with music platforms. Yet the largest category is indeed products that would traditionally be sold in stores, but instead are housed in warehouses and shipped out from distribution centers when purchased.

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In simple terms, the operations of the companies that warehouse products and ship them out can be quite expansive with many logistical moving parts. There is great opportunity for maximizing profits through this business model though either by having a wide spectrum of product types but keeping prices low or having a smaller, more specialized and higher priced selection of offerings. Either way, investment is required to varying degrees based on the size of operations. Overhead is a consideration and resources are needed to fund infrastructure developments and push operations along.

This is clearly brought to light by the announcement of a leading Chinese company investing $1 billion into their e-commerce subsidiary prioritizing warehousing and logistics, according to Internet Retailer. Tencent Holdings Ltd. has the informational website QQ.com, search engine SoSo.com, and a trading site named Paipai.com, among others that it controls. All of these require different types of operations and support, and Tencent Holdings has made it the highest priority to support the logistical side of its functioning.

Growing Chinese E-Commerce MarketThis investment also points to the strength of e-commerce in the Chinese market. As I and others have been continuously reporting, e-commerce is on the rise across the globe, but especially so in China. Forrester Research, for example, predicts that online sales will increase by 27% every year from 2010 to 2015 in the country, eventually totaling $159.4 billion by that final year, as cited by Internet Retailer.

This presents not only opportunity for those assisting in delivering on the logistic requirements of companies increasing their e-commerce operations, but also those that facilitate the online side of the business. Internet marketing experts and quality SEO and consulting agencies offer multi-faceted services to companies that are looking to gain greater exposure online and also increase conversions on their e-commerce platforms. Through search engine optimization, social media, and paid search advertisements, companies can drive more targeted traffic to their site, whether in the Chinese market or elsewhere.