China to become e-commerce leader by 2015

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A Chinese man surfs furniture items on a computer on display inside the newly opened Taobao Mall in Beijing, China. Photo - Andy Wong/AP

China will be the world?s biggest e-commerce market surpassing United States by 2015, according to a report released by Boston Consulting Group (BCG).

E-commerce in China is growing exponentially, reaching more than $314 billion worth of transactions in next 4 years with shoppers? growth estimated to be around 329 million. According to China Internet Network Information Centre, the country had 485 million Internet users at the end of June, of which 142 million shopped online.

Higher number of Internet users, lower shipping costs and growing numbers of people purchasing online are the main factors which are driving the expansion of China?s e-commerce industry. Less than 10 percent of China?s population shopped online in 2006, but figures climbed to a whopping 23 percent in 2010. Boston Consultancy Group (BCG) predicts that online shopping would go up to 44 percent by 2015.

Waldemar Jap, a partner at BCG, forecasts that there will be an astonishing growth in the first time purchasers by 2015, increasing the total number of e-commerce shoppers by 30 million. Spending power of these shoppers would also reach an average of US$ 980 per year, twice the amount they are spending today and rivalling the US average spending of US$ 1000 a year.

The report says the e-commerce market will expand in the coming years, accounting to 7.4 percent of the nation?s total retail value from 3.3 percent currently. It also mentions the unusual situation in China, as the Internet access has far outpaced the reach of the top physical retailers.

China?s e-commerce landscape can be successfully achieved by fulfilling the emotional needs of China?s spenders, said a partner at BCG. Making the shopping experience fun and learning would give emotional ties to consumers in China, rather than engaging them through mere price savings.

One limitation that affects the growth, as per the report, is the inadequate delivery infrastructure which concerns the shoppers regarding delivery of their orders. And as demand in China is mostly for the products that consumers cannot find in physical stores.

Chinese e-commerce companies such as and have withstood the limitations, responding to the concerns about delivery by making massive investments in distribution centers nationwide, the consulting group concluded.

Sources:?China Daily, VOA News, Internet Retailing

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