China’s online retail market turned over about $49 billion in business during 2010. Amazon.com Inc. (NASDAQ: AMZN) will post about half that amount as revenue for the current fiscal year, and the total US online retail market is estimated at more than $155 billion for 2010.

By 2014, US online sales are expected to reach about $250 billion, while China’s online sales will grow to about $150 billion. China’s online sales growth is expected to triple in just four years.

That kind of growth tells you all you need to know about the reported $500 million poured into Chinese online retailer 360buy.com by a group of investors including Wal-Mart Stores Inc. (NYSE: WMT). The investment follows the IPO of China’s E-Commerce China Dangdang Inc. (NYSE: DANG) earlier this month, which raised about $272 million for the smallest of China’s online stores.

The largest online e-commerce player in China is Taobao, owned by Alibaba Group, which is in turn 39% owned by Yahoo Inc. (NASDAQ: YHOO). The other major e-commerce company in China is Tencent Holdings Ltd. (OTC: TCTZF).

Taobao garners about 75% of all e-commerce transactions in China, but the site is primarily a listing service for other retailers and its revenue is estimated to be only about $200-$250 million according to The Wall Street Journal.  Tencent’s Paipai e-commerce site gets about 10% of online transactions, followed by 360buy.com’s 2.5% and Dangdang’s 0.7%.

Wal-Mart and its fellow investors clearly see a large opportunity here. 360buy.com follows Amazon’s model of selling everything from soup to nuts online, which is essentially Wal-Mart’s own model, albeit from a more modest price point on most items.

360buy.com more than doubled revenues between 2009 and 2010, with expectations of more than $1.5 billion in sales this year. That’s about six times more than Taobao on far fewer transactions.

Tencent offers popular online games, instant messaging, and other online services, but it’s e-commerce model is much like Taobao’s.

Of all the Chinese e-commerce sites, Dangdang follows the Amazon model most closely, but its weak traffic numbers and relatively high valuation make it less attractive to investors like Wal-Mart.

Essentially, Wal-Mart and friends invested in the only e-commerce player available. Whether that turns out to be a good move or a bad one remains to be seen.

Paul Ausick

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