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E-commerce chalking up strong growth
By Zhu Zhe (China Daily)
Updated: 2006-02-20 08:33

Chinese e-commerce sales last year hit a record 553.1 billion yuan (US$68.72 billion), an increase of 58 per cent over 2004; and the momentum is set to continue this year, says a new study.

The consumer-to-consumer (C2C) market has become the new growth point, with a turnover of 13.5 billion yuan (US$1.68 billion) triple the 2004 volume according to the study released yesterday by the China Internet Development Research Centre (CIDRC) under the Chinese Academy of Social Sciences.

Domestic online auction site Taobao.com, which has 70 per cent of China's C2C market users and conducted transactions worth 9.7 billion yuan (US$1.2 billion) last year, has beaten the Chinese unit of US auction service eBay to become the No 1 C2C website in the country by offering free services.

As part of the study, a CIDRC survey conducted last December among 3,483 netizens in five Chinese cities Beijing, Shanghai, Chongqing, Xi'an and Jinan showed that by the end of last year, more than 71.3 per cent of netizens had shopped online, while this proportion in the Asia-Pacific region stood at an average of 70 per cent.

And about 95 per cent of the respondents said they were optimistic about the future of online business, which indicated there would be continuous growth in the coming years.

The great variety of commodities available online and reliable payment methods are regarded as two major contributors to the increase, said Ma Haitao, a CIDRC researcher who led the study.

The number of items available online has exceeded 60 million in China, says the study. "Online shoppers are offered more alternatives, which is a great stimulus to the market," Ma said.

Book, audio and video purchases topped the online shopping list, but sales of computers, mobile phones, digital cameras, mp3 players, airline tickets and accessories have increased by a large margin.

The development of online payments, such as Paypal and Alipay systems, has eased worries about security the survey shows that about 70 per cent of online shoppers prefer online transactions to cash payments. Ma said the payment change would facilitate online trade and was "a landmark in the development of Chinese e-commerce."

However, 43 per cent of respondents expressed concerns over the quality of online goods and after-sales service.

Ma admitted that a lack of a supervision mechanism might hinder the development of e-commerce, and a growing number of customer complaints are testimony to the trend.

The Beijing Consumers' Association announced that it handled 76 complaints about online shopping last October, an increase of 66 per cent over the same period in 2004.

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