Exciting Potential of China in e-Commerce

The biggest market in the world is in China and the untapped online retail market is stupefying. China’s online population is 220 million, ranked number one in the world, overtaking even the USA. Fifty-five million Chinese Internet users shopped online, recording turnover of US$8.25 billion. This is, however, only the tip of the iceberg: a consumer is calculated to spend an average of 1,000 yuan (a mere 0.64 of total retail spending in China).

As Internet use blooms in China and issues such as fake goods and credit card theft are ironed out, e-commerce is set to grow rapidly in this populous nation. By 2011, the China Internet Research Centre in Beijing predicted that online spending will hit 406 billion yuan. The biggest challenge facing Internet companies is not technical but psychological. Chinese consumers are still dogged by wariness and a lack of confidence in online settlement systems.

China’s dominant Internet retailer, Taobao.com, a subsidiary of Alibaba.com, holds 80% stake in e-commerce turnover. China’s online shopping surpassed the 50 billion yuan threshold in record fast time. This shows not only the potential market in China but also that system and logistics of e-commerce have been adequately established. Internet companies are understandably jumping into the bandwagon and working hard to tap the vast market.