eCommerce development in China is growing rapidly and the market is far from being saturated given the growing number of internet users, broadband coverage, smartphone coverage, and the rising of average disposable income. Affluent consumers in China, especially those from small cities, are looking for high quality products and brands. The expansion rate of offline shops is far behind the expectations of these consumers. For brands and retail merchants who want to enter China market, the best way to maximize contact with target consumers is to set up online shops. This way they can also standardize service levels and maintain brand image. Compared with US market structure, and in addition to the users’ increased need and maturity of new brands in the marketplaces, independent merchants will play an important role in the future of China’s market.

1. The Rise of Credit Card Usage
The Growth of Affluent Class
The bank card penetration rate reached 43.5% in 2012,
demonstrating a huge grow potential which further
facilitates online shopping†.
By 2020, the affluent class in China will reach 280M, i.e.
20% of China’s total population**
43.5%
GROWTH TREND OF ONLINE SHOPPERS IN CHINA
Despite the fact that the growth rate
of internet users has slowed down,
the online shopping population is
rapidly growing**.
By 2013, the number of online shoppers
in China will surpass the total population
of U.S$, which will be
42.9%
322M
37.8%
35.1%
28.1%
24.5%
22.1%
24.8%
24202
19395
The coverage of real retail shops is
limited in China. For the consumers from
3rd and 4th tier cities or rural areas who
cannot access real retail shops, they will
choose online shopping**
16051
10800
7400
4641
3357
2006.12 2007.12 2008.12 2009.12 2010.12 2011.12 2012.12
Internet Users (00,000)
% of online shoppers
NEW TREND OF THE ECOMMERCE MARKET IN CHINA
Independent merchants in China
numbered 10% in 2011, while there was
76% in US at the same period, indicating
that there is a huge potential for
independent merchants in China#
CHINA
Sharing on social media drives
users’ passion in online shopping
More than 10 times
US
As smartphone is getting popular,
mobile shopping in China is
expected to reach 17.8%∞ by 2016
15%
6-10 Times
17.8%
24%
No. of purchases
influenced by social
media on users over
the past 6 months#
90%
76%
10%
82.2%
Independent Merchant
eCommerce Platforms
Comparison of eCommerce Platform
and Independent Merchants between
China and US in 2011
4-5 Times
1-3 Times
23%
55%
Mobile Shopping percentage (%)
PC-based Online Shopping percentage (%)
Sources:
*CNNIC, “2012 Online Shopping Market in China Research Report”, March 2013
#McKinsey Global Institute, China’s e-tail revolution: Online shopping as a catalyst for growth, March 2013
+
CNNIC, “China Online Retail Market Data Analysis Report 2012”, February 2013
†
The People’s Bank of China, General Overview of the Payment System in 2012, February 2013
**
BCG, “The World’s Next E-Commerce Superpower: Navigating China’s Unique Online-Shopping Ecosystem”, November 2011
*iResearch,“China Online Shopping Research Report 2012”
$ U.S. Census Bureau: State and County Quick Facts
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