Online Shopping Boom in China
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Shi Fang spends more than 4,000 yuan (US$588) a month shopping, but she rarely goes to the shopping mall.
"Why need a shopping mall if you have Taobao? I am a Taobaoer," says Shi, 28, a freelance writer in Beijing.
Taobao, China's largest online shopping site has become an indispensable part of Shi Fang's life. She spends half of her monthly salary to Taobao, logging onto the website every day, even when she doesn't need anything, simply to "stay updated to the latest items".
A growing number of Chinese Internet users like Shi have discovered the joys of online shopping. The China Internet Network Information Center (CNNIC) announced in December 2009 that more than 87 million Chinese made purchases on the Internet in the first half year, which means one out of four Chinese netizens have online shopping experience.
Most online shoppers are students or white-collar workers aged18 to 30, with a monthly income of 1,000 yuan (US$147) to 3,000 yuan (US$441). More women shop online than men. Clothing and home-use products are the most popular goods bought online.
It is estimated that the annual consumption from online shopping will reach more than 250 billion yuan (US$37 billion) this year, and 80 percent of this is carried out through Taobao.com, China's fast-growing e-commerce hub established in 2003.
Taobao, meaning "hunting for treasure" in Chinese, is owned by Alibaba Group, which is also parent of Alibaba. com, a global e-commerce site for small and medium businesses connecting buyers with sellers.
Shi Fang is only one of the 159 million registered users at Taobao. She could find almost everything she needs from Taobao, from underwear to furniture, from candy to DVD player.
The biggest attraction for Shi Fang is the relative low price for online goods, compared with those in stores in bricks and mortar. Her favorite facial cream costs 1,680 yuan (US$247) for a 30ml bottle in the local shop, but a 10ml sample of the same brand only costs 68 yuan (US$10) online.
"I bought three samples for 204 yuan (US$30) plus a delivery fee of 12 yuan (US$1.8). I saved 1,464 yuan (US$215) for the same product, same quantity and quality," Shi flashed a grin.
The Taobao instant messenger, a communication channel for buyers and sellers, also facilitates online shopping and ensures the overall experience for both parties. Shi Fang regards it as a platform to foster trust and maintain contact.
"You can check the information easily. It is sweet that the owner will remember you once you have regular chat with him or her through the messenger. You may receive some personalized service such as getting more samples or certain discount," said Shi.
Also a faithful Taobaoer, Yang Fei is not as lucky as Shi Fangin terms of shopping online around the clock. Her company has blocked Taobao during working hours as more and more employees were doing online shopping at work time.
"Now I can only have a glimpse on the website during the one-hour lunch break and quickly make my order," said Yang Fei, 27, frowning.
While some may question the security of online purchases, Yang Fei gave a thumb-up for Alipay, the Taobao payment method launched by Alibaba Group in 2004 in partnership with leading banks in China. It enabled her to buy more than 200 items online since she registered in 2007.
"It's very safe and convenient. Unless you confirm the arrival and satisfaction about the purchase, the shop owner will not get the money. You can also get the refund if you want to return the purchase," she added.
Thanks to online shoppers like Shi Fang and Yang Fei, Taobao is expected to achieve 200 billion yuan (US$29 billion) in transaction volume in 2009. The company predicts that the figure will reach 400 billion yuan (US$58 billion) next year.
"On-line shopping provides a convenient and accessible platform for customers who want to shop for variety. It is especially viable given the current economic downtown," said Prof.Lu Benfu, an expert on Internet economy at the School of Management, the Chinese Academy of Sciences.
China's growing Internet economy has demonstrated "not only sufficient confidence to withstand the financial crisis, but also promised substantial profits," Lu added.
It is no wonder then that individuals like Shi Fang have taken their virtual shops on Taobao.com as jobs to last.
When Rong Rong opened a Taobao shop in 2004, she did all the packing and delivery herself. Now having her own warehouse packed with four shelves of hair products while employing three assistants, Rong Rong has earned herself a 720, 000-yuan (US$106, 000) flat and a Honda car that's worth 200, 000 yuan (US$29, 000).
"On the busiest day, more than 100 parcels need to be delivered. To date, over 50,000 customers have bought goods from my shop. The transaction volume grows 50 percent each year with a 10-percent increase in profit," said Rong, 37, who used to own a hair salon.
She sold her hair salon last year and turned her part-time Taobao shop into a full-time job after profits from the shop have tripled that from her hair salon.
"Prices for my products are not the lowest, but I sell the most in the hair product category. The key is to understand consumer behavior if you want to cash in on the website. Quality service and professional advice to customers in choosing products that suit their hair condition are also important," she said while arranging her stuff in packing.
"I have to work from 10am till midnight. My only entertainment is walking my dog for half an hour after lunch. But I will continue the business. Nothing can beat the pleasure in seeing your own business grow from scratch," said Rong, adding that under her influence, her father has joined online shopping in his 60s.
The growing purchasing power of China's online shoppers has been noted by traditional brands from home and abroad.
China's biggest Xinhua Book Store has an outlet on Taobao; Japan's casual wear seller UNIQLO also opened a shop in April; China Eastern, an airline company that operates from Shanghai, will soon set up an online ticket store on Taobao.com.
"The strategy next year for Taobao is to facilitate the business to consumer platform. The website will help more companies sell products online," said Ma Yun, CEO of Alibaba Group.
To fight fake products sold on its website, the company has injected 100 million yuan (US$15 million) in an ad hoc campaign. Hundreds of shops selling fake stuff have been closed while those selling fake products are put on a blacklist.
"A sound Internet economy relies on companies' social responsibility in e-commerce. Credibility, security and services are the driving force for dot-com companies to grow," said Jiang Qiping, secretary-general at the Information Research Center of the Chinese Academy of Social Sciences.
As Shi Fang was busy surfing online for Chinese New Year gifts and Rong Rong promoting her online Chinese New Year sale, Ma Yun is quite confident for the prospect of China's e-commerce.
"Among the two billion parcels delivered across China this year, 1.2 billion are goods from Taobao. We're planning to provide online shopping experiences for a billion people around the globe," said Ma, who believes that Taobao won't be replaced in ten years time.
(Xinhua News Agency January 9, 2010)