Chinese online shopping spending could be worth more than Switzerland's GDP

Alibaba's recent IPO filing saw the company project that China's e-commerce market, already one of the world's largest, will double in size by 2016. 

Standing at an already colossal 1.84 trillion yuan ($295m) in 2013, Alibaba predicts yearly online shopping will swell to 3.7 trillion yuan ($607.9bn) in two years.

To contextualize these figures, that spending would amount to more than the nominal GDP of either Sweden or Switzerland. The current number is already more than the entire economies of Egypt or Finland. 

Although China has the world's largest internet population, around 618 million people according to government figures, online shoppers only account for just under half this number.

It doesn't match up with other developed countries, such as Germany where online shoppers make up nearly 80 percent of total web users, but the middle class in China is fairly new, and the amount of shoppers is expected to swell dramatically in the next two years.

“We think that number will increase,” Alibaba writes in its prospectus, going on to suggest that as more families in smaller Chinese cities become wealthier and gain internet access, they'll start to shop more online due a shortage of actual retail stores in China's less developed areas. 

Another focal point of Alibaba's filing was its spotlight on smartphones as the key to increasing online spending. With 500 million Chinese using smartphones at the end of 2013, it follows that tapping into a market where customers have constant access to products will "accelerate the adoption of e-commerce", the tech giant said. 

One savvy investor eagerly awaiting Alibaba's IPO is Masayoshi Son, the Japanese CEO of SoftBank. Fourteen years ago, he took a gamble on a little known web portal connecting Chinese manufacturers with overseas buyers. His respectable investment of $20 million is now worth around $56 billion, according to Bloomberg.

[Image: Alibaba founder Jack Ma. Via Reuters]