Online Shopping Clicking up

Analysts believe rise will slow as buyers mature

Amid the fierce competition among online retailers in China, total transactions in the Internet retail marketplace jumped 47.3 percent year-on-year to 754.2 billion yuan (US$123.2 billion) in the first half of this year, according to a report released on Monday.

Online retail transactions accounted for 6.8 percent of all the retail sales in China during the same period, according to the report by the China e-Business Research Center, a Hangzhou-based independent research firm.

Online shopping is expected to contribute 7 percent of China's retail sales by the end of this year, with the total turnover of online shopping reaching 1.74 trillion yuan in 2013, said the report.

Tmall.com, a leading business-to-customer online platform owned by China's e-commerce giant Alibaba Group, is the biggest winner in the first half of this year by securing 50.4 percent of the market share in Web-based retail business.

JD.com, another online retailer, slightly increased its market share to 20.7 percent, taking second place. The online business sector of Suning Commerce Group Co Ltd, a leading home appliance retailer, made significant progress in the first half of the year.

The company's market share increased 54 percent year-on-year, securing a total of 5.7 percent of China's online shopping market between January and June.

Despite that booming growth, online retailers still feel a certain chill. Liu Qiangdong, the founder and chief executive officer of JD.com, a leading online retailer in China, said "it is difficult to sell", speaking at the company's open platform conference in late July. His speech was echoed by a lot of seated vendors, who sell their products via JD.com.

Mao Ajing, an e-commerce analyst with the Beijing-based research firm Analysys International, said with the maturity of the online shopping market in China, the extremely high records in sales, which were set by Web platforms in the previous two years, are unlikely to happen again.

According to a previous media report, as much as 19.1 billion yuan, a record-high, was spent on a 24-hour shopping bonanza at Taobao.com and Tmall.com — both owned by Alibaba Group — on Nov 11 last year, a date known as Single's Day in China.

"The growth rate of the online retail business in China was about 60 percent in 2011. It will be difficult for the market to keep a similar momentum this year because online shoppers are becoming more rational," Mao said.

Her company expects the growth rate of the online shopping market in the second half of this year to increase by 5 percentage points compared with the figure in the first half of this year. However, the overall growth rate of the online retail market in China is still estimated to be below 50 percent, she said.

China's State Council issued guidance in mid-August to boost information-sector consumption, aiming to make the industry a new economic powerhouse for China.

According to the guidance, the transactions of e-commerce, which is a major part of the information sector, are forecast to total 18 trillion yuan, with online retail transactions reaching 3 trillion yuan by 2015.