Online shoppers in China got lower prices on a range of items in the first half of the year, according to a price index compiled by Taobao.com, which claims to be the country's largest online auction site.

The online consumer price index (CPI), or the "Taobao CPI", reflects prices for the most popular items that the site's 67 million registered customers bought, including clothing, digital goods and cosmetics.

According to Taobao.com, prices rose by 0.41 percent month-on-month in January but then fell month-on-month thereafter, dropping 2.74 percent, 7.28 percent, 9.24 percent, 6.35 percent and 8.22 percent from February to June. The company plans to release the index each month from now on, it said over the weekend when it released the index.

These declines show that despite a huge increase in the national CPI, most urban residents, especially young people, got lower prices on their daily non-food purchases in the first half of 2008, said Zhang Yanping, an e-commerce analyst at Shanghai-based iResearch.

Falling online prices also reflect competition among virtual vendors, as it is easy for consumers to compare Internet prices, said Zhang.

"I used to buy Kiehl's lip balm from Taobao.com at a price of 87 yuan last summer, but it cost me only 57 yuan this week from the same store," said a 22-year-old woman surnamed Zhang, who claimed that most of her make-up comes from online shops. The price of 87 yuan is equivalent to about US$12.60 these days.

More than 55 million people in China purchased something online last year. Half of the netizens in major cities such as Beijing and Shanghai shopped online in 2007, according to China Intelli Consulting, a Beijing-based consulting firm.

Online shopping transactions hit 16.2 billion yuan in 19 affluent cities during the first half of 2008, according to the China Internet Network Information Center.

(Xinhua News Agency July 9, 2008)