Look at that picture on the left. Doesn’t the face look a bit smug? It might have something to do with the Alibaba Group’s latest valuation, and how it compares to its major competition.

Last week, I wrote about the struggles of 360buy, which, battered by the price wars in China’s ultra-competitive ecommerce market, is looking at raising a round of funding that could see its valuation dip. Critics say the company is trying to do too much too quickly, which is one of the reasons it has reportedly backed down from filing for an IPO that was widely expected to happen some time this year.

But not all the news from China’s ecommerce sector is bad. The Alibaba Group is clearly more than keeping its head above water – in fact, it’s also giving quite a bit of help to an American giant that has recently seen some rough times itself.

The New York Times reported late last night that the owner of Tmall, 360buy’s main competitor, is on the verge of closing a round that would value it at as much as $43 billion in equity. This is the first valuation estimate for the company since its agreement to buy back a 20 percent stake in itself from Yahoo. Currently, Yahoo’s 40 percent stake in the company makes up more than half of the Sunnyvale company’s $20 billion market value, according to the Times.

The $8 billion funding round – which is yet to be confirmed – suggests that there is still strong faith in the ecommerce market, despite the price wars, which will continue to make life difficult for the smaller players. It also augurs well for the company’s intentions to go public within a couple of years.

The faith in the market potential is well-founded. Because it lacks the retail infrastructure enjoyed by more developed countries, China has a strong need for ecommerce, especially in the lower-tier cities. Plus, the market, now moneyed up and ready to trust the idea of buying from Web sites, is exploding. There are already 193 million online shoppers in the country, says a report from the Boston Consulting Group, and by 2015 each one will be spending as much online as Americans do today. The US, meanwhile, is the second largest ecommerce market in terms of numbers, with 170 million online shoppers.

But there is probably only room for a few major players at the top. Alibaba, with Taobao and Tmall, will be ultimately be there, and 360buy, even hobbled by a costly logistics operation, will probably be there too. Recent conversations I’ve had have suggested another player could rise to the top within the two to three years. That company? Amazon.

Amazon has a market share in China that so far measures only in the low single-digits, but its deep pockets gives it the ability to ride out the price wars, and its trusted brand will ultimately serve it well as the market matures and becomes more willing to pay higher prices for quality products. Its experience in developing a sophisticated logistics system will also be crucial.

Meanwhile, I’ve heard an alternative explanation for the abrupt departure of 360buy’s COO in the midst of its apparent efforts to raise funding. One story holds that the executive, Shen Haoyu, was on loan to the company from Baidu, whose founder, Robin Li, is a major investor in 360buy. The theory goes that the COO would stay with the company until it was ready to stand on its own two feet. Now that it has achieved that, he could return to the mothership, my source says. By that line of logic, 360buy might be in a healthier position than many in the market might have thought.

With two warring giants backed by huge investors, and an American player that will surely soon start throwing its weight around, this space isn’t going to get any less torrid, or any less interesting, for some time yet.

With the price wars making costs for consumers ever cheaper, it’s also a great time to grab yourself some sweet Feiyue shoes for cheap.