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China's e-commerce market expected to surge in years ahead

The surge in online shopping is attributed in part to an increase in personal incomes and more familiarity with Internet retail sites.

November 12, 2011|By Andrea Chang, Los Angeles Times
  • Chinas surge in online shopping is due in part to rising incomes and familiarity with retail sites on the Web. Above, an Internet cafe in Beijing in 2008.
Chinas surge in online shopping is due in part to rising incomes and familiarity… (Diego Azubel, European…)

China's online shopping market is expected to surge over the next several years and could reach 2 trillion renminbi, or $315 billion, by 2015, according to research by Boston Consulting Group.

The study found that Chinese shoppers are the most likely of the world's online consumers to check for product recommendations on social networking sites, and that online retail giant Taobao is the dominant e-commerce player in China. Last year the site, which has more than 800 million online products, accounted for 79% of China's online transaction value, selling more than the country's top five physical retailers combined.

BCG also said that one of the biggest challenges posed by e-commerce growth in China is its delivery infrastructure: 45% of surveyed shoppers said they worried their purchases would be switched for fakes during delivery.

The surge in e-commerce spending in China is due in part to an increase in personal incomes and more familiarity with online retail sites. The trend is also benefiting from the limits of bricks-and-mortar retailing in China: By 2015, 365 cities will have 100,000 or more middle- and affluent-class consumers, but China's largest retailers have stores in only about 260 cities today, BCG said.

The consulting firm's research included a survey of more than 4,000 online shoppers in China and looked at the differences between Chinese online shopping behavior and that of developed markets.

It also examined how e-commerce expansion will unfold in China and the biggest challenges companies from outside China face as they try to cash in on the rapid growth.

andrea.chang@latimes.com

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