Business

Will Alibaba Double Its Transaction Volume In Spite Of Suspicious Accounting Practices?

Alibaba, the Chinese e-commerce giant, expects to double the number of its transaction volumes by 2020 although it has shown intent to shift away from GMV measurement as it faces investigations over its accounting methods. At an investor’s conference that took place at Alibaba’s headquarters in Yangzhou, China, the company has stated its expectations to record a 6 trillion Yuan ($912 billion) in gross merchandise volume (GMV) in 2020 which is nearly double the 3.09 trillion Yuan for the current year.

Alibaba would be reporting its GMV on an annual basis instead of quarterly basis according to its chief financial officer, Maggie Yu. Because of the astronomical value of good that are sold through the online platform, many observers were suspicious on the way the value of goods is calculated. Based on government statistics, the total retail sales of consumer goods in China for 2015 was only 30.1 trillion Yuan. According to Alibaba’s executive chairman Jack Ma, GMV is an important metric but it is not the only measurement used by the online retailer.

According to Alibaba, a month ago, the US Securities and Exchange Commission has launched an investigation into the company’s accounting practices to determine whether it has violated any federal laws. One of the issues being probed by SEC is Cainiao which is a data logistics company that is partially owned by Alibaba. Cainiao joined Alibaba in 2013; however, Yintai Holdings, Fosun Group, Forchn Holdings and five other major delivery companies were previously unconsolidated in Alibaba’s financial statements. This issue has raised a lot of concerns and questions among investors and financial analysts.

Wu said that Alibaba has the right to decide whether or not it will consolidate Cainiao as long as it complies with GAAP accounting practices. There are also concerns regarding counterfeit items on the online platform but Alibaba promises to stop the fake products as well as the counterfeiters and intellectual property thieves.

In the United States, PaperMart.com is the largest and most complete packaging store that you can access online. Same day shipping of orders is guaranteed without compromising the high quality and affordability of its packaging supplies.