E-commerce unlocks big deals in small markets

Lower-tier cities in China becoming a key sales-booster for e-marketplaces

Lower-tier cities and small towns in China used to be regarded as less sophisticated, but the recent better-than-expected performance of some e-commerce and retail companies in such places has shown that they have impressive purchasing power as well as the potential to spawn new business opportunities outside the fiercely competitive markets in higher-tier cities, industry insiders said.

Jiang Fan, president of Tmall and Taobao, Chinese e-commerce giant Alibaba's online marketplaces, said at a conference in September that more than 70 percent of their new consumers came from lower-tier cities and small towns over the last two years. New users spend on average more than 2,000 yuan ($281) in the first year after their registration.