Alibaba, China's largest online and mobile commerce company, says that its online sales will surpass the worldwide sales of Wal-Mart in just two years. But is that even close to realistic?

"Within two years, the online retail volume of Alibaba will exceed the sales of Walmart," said Alibaba's president Jin Jianhang at an e-commerce conference in Hangzhou, China, reports Xinhua.

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That's a pretty bold prediction to make, considering that retail behemoth Wal-Mart reported a staggering $476.3 billion in annual sales for 2014. Alibaba, on the other hand, reported a relatively paltry $2.54 billion in its most recent quarter, which would extrapolate to a little more than $10 billion on an annual basis.

So as of now, Alibaba's revenue for an entire year is still but a fraction of WalMarts takes in in sales on a monthly basis.

It's possible Jianhang was using gross merchandise volume figures when crunching the numbers. For fiscal year 2013, Alibaba took in a gross merchandise volume of $248 billion dollars on its three major trading platforms, which is reportedly more than those of eBay and Amazon.com combined.

The company expects that figure to balloon to $490 billion by 2016. But is it fair to compare one company's gross merchandise volume to another company's revenues? 

Gross merchandise volume is defined as the total value of merchandise sold over an established time period, before deducting fees and expenses.

"Gross merchandise volume is irrelevant," writes Paulo Santos in financial analysis site Seeking Alpha. "What matters is the margins the companies are able to extract from this volume."

Whether Alibaba can realistically surpass Wal-Mart within two years is debatable, but the Chinese company undeniably has its sites set on surpassing the world's largest retailer.

"We want to be bigger than Wal-Mart," Alibaba  founder Jack Ma told CNBC in September when the company launched its initial public offering on the New York Stock Exchange. 

TagsJin Jianhang, Jack Ma, Walmart, Gross merchandise volume, ecommerce