8 Key Factors Shaping China’s e-Commerce and e-Payment Markets
My friend, Einat Tzur, the Executive Manager of Israel Chamber of Commerce in China (ISCHAM),  sent me this great white paper, written by  Boaz Rottenberg, the Managing Director of Maverick China Research, a Beijing-based market research firm which provides business-to-business research and market entry services for clients seeking opportunities in China.
The paper summarizes the key factors shaping the development of China’s e-commerce and online payment markets today. These factors are crucial to understand how China’s e-commerce market developed to date, and what are the obstacles facing incumbent players and newcomers to this market in the future.
The key points of the paper are:
- China Internet Users: 360 million (Q3/2009)
- China Internet Cafes – an amazing phenomenon with  enormous influence
- Taobao and the Dominance of the Alibaba Group
- Online Payment – Lagging behind the rest of the developed world
- Bankcards Issued: 1.8 billion (!); Used in a Quarter of Consumer Spending
- Credit Card Use Remains Low; POS Terminals Limited
- Consumers still favor cash – this to me is an amazing truth. Whereas in the Western world cash is no longer a commodity (OK, i exaggerate a bit, but still – who uses cash today???), in China people are using cash and only cash for their daily transactions and also for their bigger purchases.
According to the research, by 2013 approximately three quarters of purchases in China’s e-commerce sector will be made with online payment methods, and cash-based payment will decrease to approximately 10% of e-commerce payments.
In my opinion, this transition from cash to more advanced technological methods of payments, would boost even further the Chinese economy and its domestic consuming, which has been very conservative so far. Once the Chinese will get used to the idea that they can buy (almost) any product  or service online, they will loosen up their hand on their “safe bolt” and join the spending spree that the Chinese government encourages so much (the Chinese government is aware to the fact that they cannot continue to rely on exporting to the rest of the world as the only engine of growth and hence are trying to encourage internal consuming.)
Wise entrepreneurs and investors (proper disclosure: I am the co-founder of www.Meijob.com and www.Jipingmi.com, both are web ventures in China) have already invested enormous amount of time and money in China ventures, anticipating and waiting for the great consuming boom that is right around the corner. See you all there 
.
Related posts:
