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E-commerce boom continues in China

E-commerce boom continues in China

Write: Armon [2011-05-20]

BEIJING - For Wen Zhenhua, the biggest success of her career was the bulk sale of condoms on www.meituan.com, a newly-opened and flourishing group-buying website.

Some 50,000 international brand condoms sold out within hours of going on sale, and to Wen's delight, many Chinese Internet users discussed the sales as such trade in condoms is rare in China.

"As the first among Chinese group-buying websites to sell condoms, we were pleased with the consumer response," said Wen, marketing manager at Meituan.

The condoms were sold for a price of one yuan (15 cents) each, down from the market price of 3 yuan each.

Meituan has more than 200,000 registered users only four months since it was established. It is now one of the leading Chinese group-buying websites.

Wen said she is not surprised about the rapid increase in registered users -- she is "of course very happy about it" -- given that Chinese e-commerce is developing at a dazzling speed.

Nearly 34 million Chinese people joined the online shopping army in the first six months the year, bringing the total number to 142 million.

These figures mean one out of every three Chinese Internet users, or one out of 10 Chinese people, shops online, according to a report by the China Internet Network Information Center (CNNIC) released Thursday.

"The rise of group-buying websites showcases the regional development of e-commerce," the report says.

Online retail sales increased 117 percent annually between 2007 and 2009, and they are expected to amount to 450 billion yuan ($66.45 billion) this year, according to the research center of Alibaba Group, which runs the global e-commerce site Alibaba.com.

"The Internet in China is moving from a platform for information and opinion to being a network with diverse applications and mass participation," said Hu Yanping, general manager at Data Center of China Internet, an independent Internet market monitoring agency.

Hu says Chinese Internet users' online consumption will continue to grow rapidly.

Nowadays, Chinese people not only buy articles of everyday use like clothes and snacks on the Internet, they also buy cameras and laptops and luxury goods like diamonds. Reports say some automakers plan to sell vehicles online.

For many people, online shopping means a change of lifestyle and convenience with a few mouse clicks.

Tsinghua University student Liu Dun, 21, bought a ticket to a Beijing golf tournament for just 20 yuan -- instead of the usual 1,000 yuan -- on group-buying website Aibang.com.

Liu says he made "a lot of friends" after the tournament.

"I will continue to shop through online team buying because it brings people with similar interests together and it saves money."

"We provide personal consumption goods for local white-collars workers rather than real goods," said Meituan founder Wang Xing in a recent magazine interview.

Meituan and its counterparts have sold coupons for Karaoke singing classes and laser-gun battle parks.

"We want our clients to get out of their home and enjoy something they have not tried before," said Wen Zhenhua.

Wang Xing attributed the success of his website to accurate market positioning and the development of the Internet itself.

"We could not have survived five years ago because of the lack of a mature online payments system and the limited information dissemination back then," he added.

According to the latest CNNIC report, about 128 million people have used online payment systems and 122 million have used online banking services.

But veteran Chinese Internet users still remember an Internet-based life experiment in 1999.

The experiment involved 12 volunteers spending 72 hours connected to the Internet and trying to get food and clothing online.

One of the volunteers with little knowledge about the Internet was forced to leave after starving for more than 26 hours. None of the volunteers were able to persuade people to accept their electronic currency as payment. They had to pay cash for everything.

One of them tried to pay with electronic currency at five or six websites but failed.