China Internet Purchases Up

Released on: Thursday, June 14, 2007 8:00 AM

    

China Internet Purchases Up

China online purchasing is taking baby steps.  Like any market in its infancy, they are experiencing growing pains.  Twenty million Chinese Internet users made at least one online purchase last year, spending an equivalent of $20 USD (RMB157). Researchers report this is approximately 15 percent of their online population. The number of people shopping online and the amount they spend annually will follow an upward trajectory, forecasting to increase five times by 2010.  How does this compare to US online shopping?  In comparison, 66 percent of US online shoppers age 14 and older made a purchase last year. 

Year	Amount Spent Per Year*
2006	RMB157 ($20)
2007	RMB237 ($31)
2008	RMB358 ($47)
2009	RMB513 ($69)
2010	RMB713 ($98)
*Includes online travel purchase.  Internet user defined as person ages 3+ who accesses the Internet at least once a month.	* Currency converted at annual exchange rates.

Source: eMarketer

Three of the speed bumps impacting the pace of market growth, according to CNNIC (China Internet Network Information Center), are low credit card use, lack of reliable infrastructure for settling transactions, and delivery challenges.  Only a quarter of the buyers in China surveyed by AC Nielsen used credit cards for their online purchase.  Credit cards are the favored form of payment in America. The number one reason given for not purchasing items on line is concern about the security of the transaction information.  These concerns explain why the favored payment plan in China today is COD (cash on delivery.)

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