China's Internet population is the largest in the world with 230 million netizens, the equivalent of the entire population of the U. S. Interestingly, it may seem that there is a tremendous amount of Internet trafffic in China; however, this number does not translate into an equal volume of e-commerce activity. Well, at least not just yet.
While the numbers are improving at a fast pace, there are some trends that are becoming evident in the online shopping world.
Take the case of the profile of the online shopper. Most online shoppers are well-educated. Apparently, the online shopping rate rises as the educational level of the shopper is higher. Around 80% of these shoppers live in highly urbanized areas such as Shanghai, Beijing and Guangzhou and work in joint ventures or enterprises with foreign investors. Statistics also show that the average income of online shoppers is higher than the average income of Internet users.
The most popular items being purchased online are clothes and accessories, followed by books, audio and video products, cosmetics and jewelry and digital products and accessories. Female shoppers are more likely to buy cosmetics and jewelry online while the males tend to buy more digital products, recharge cards, computers and computer accessories.
Cash-on-delivery is still the most common mode of payment. This is largely due to the general mistrust in the online payment systems available and fear of credit card fraud. Online sellers manage to offer cash-on-delivery as a payment option because manpower costs for delivery and collection are still cheap.
Nevertheless, logistics issues appear to be the main reason why online shopping is at its lowest in remote or rural areas. In fact, many online sellers offer delivery in metropolitan areas and those that are served complain of very long delivery times.
All in all, it seems that e-commerce growth has been inhibited by a combination of factors. Mistrust for online payment systems, fear of credit card and online sales fraud, fear of identity theft, sale of counterfeit goods and inefficient logistics for delivery have prevented online sales from taking off in China.
But an observer who has compared online shopping with the Chinese hockey stick believes that it will only be a matter of time before trust in the online system of buying and selling will set in. This is because the Chinese are known to gradually adopt certain habits and behaviors after shedding their fears.
Indeed, the continuing growth of Internet penetration and e-commerce activity may be proof of this Chinese trait. More and more e-commerce watchers in China are expecting to see more positive changes in online buying behavior.
In the meantime, you may want to position yourself accordingly as e-commerce in China enters the booming stage.
Chinese eWhispers is a facts-based, resource-rich ebook that shows how the growing number of internet users in China opens up unprecedented opportunities for internet marketers. Regardless of your product, you simply cannot afford to be without a good understanding of this lucrative market.