You can create XML or HTML Sitemap and as you have too many products so better create your sitemap as per the category and create several site maps and you can place in various pages of the site. This is another way you may manage your sitemap.
The site map you shown is a HTML site map. Actaually there are two site maps one is XML site map (which Google can read to crawl your web site faster) HTML another one(which Human can understand and will get Idea of site structure). It is better to create a xml sitemap i.e sitemap.xml and submit it to Google like(domain.com/sitemap.xml). You can create it online by www[dot]xml-sitemaps[dot]com, but it will not generate more than 100 pages i think. there will be some other tools to generate more pages if you do a proper serach in Google. Generate it and create a sitemap, if your web site contains more than 80k links then it is advisle to break the sitemap into 3,4 diff sitemaps.
Exactly…as far as I’m aware one is intented for the bots (google) (the xml version) and one for your human visitors (the html version). Therefore obviously you want to tailor the html version to human eyes.
The xml version can be submitted to google and various other search engines, and you can see how its indexed in your google webmaster tools.
There are many tools and sites on the net which will help you create sitemaps effortlessly.
For SEO or for search engine you need to submit site map. You can hide some of page which u think search engine should not crawl. You can remove those pages from site map then submit it to different search engine or put that site map on your own website.
I think your solution is fine. You can only include 50,000 pages in a single XML sitemap…so you would need several of those as you do for the html pages.
You are right about 50,000 pages website but i am sure about one thing that is user may not visit the whole 80,000 products pages. I think good practice is to categorize the product and minimize the pages as much as possible.