China set for ecommerce boom

Huge market, huge potential

China could become the world's biggest online market within two years, according to a report examining the country's potential for electronic commerce.

Ecommerce is already beginning to take off in China with four in ten buying something online. This year two in three people are expected to buy online, with books and computer gear proving particularly popular.

The Chinese market is "huge and willing to buy online"; and people wired up to the net are also young and affluent, finds Connecting with China - A report on the business opportunity provided by China's 100m online consumers.

Nine in ten of those using the net are under 40 years-old, while two thirds earn or exceed the average wage for city dwellers.

With more people shunning TV and preferring to venture online, China represents a "marketers' dream" with huge opportunities for companies - both established and start-up - to profit from a massive audience, report author Sean Hargrave writes.

However, the lack of secure and trusted payment systems means etailers need to be more inventive. Credit card penetration in China is very low with many punters reluctant to pay upfront for goods because of fraud fears. Two in three transactions are paid for by cash-on-delivery or via post office transfer.

China's huge population and ever-growing online numbers presents real potential for commercial gain, but the country is also very wary of the net and its influence.

Over the last year it has launched a nation-wide crackdown against cybercafes fearful of the net's influence on people and of China's culture.

Recently, a top official in the country wrote that the that the domination of the English language and Western ideas online are a threat to China's cultural identity. The article warned of that "other political patterns, value concepts and lifestyles opposes and undermines socialist values".

It went on: "The use of the internet for cultural aggression is extremely dangerous, threatening to a people's culture, independence and freedom, even going so far to possibly unsettle a people's or a country's foundations." ®

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