There are at least 159 million online shoppers at e-commerce hub Taobao, which is revolutionizing consumerism. Rong Jiaojiao of China Features reports
Shi Fang spends more than 4,000 yuan ($588) a month shopping, but she rarely goes to the mall.
"Why go to a mall if you have Taobao? I'm a Taobaoer," says Shi, 28, a freelance writer in Beijing.
China's largest online shopping site has become an indispensable part of Shi's life. She spends half of her monthly salary on Taobao goods, logging onto the website every day simply to "stay updated".
A growing number of Internet users like Shi have discovered online shopping. The China Internet Network Information Center (CNNIC) announced in December that more than 87 million Chinese made purchases on the Internet in the first half of 2009, which means one out of four Chinese netizens have online shopping experience.
Most online shoppers are students or white-collar workers, aged 18 to 30, with a monthly income of 1,000 yuan to 3,000 yuan. More women shop online than men. Clothing and home-use products are the most popular goods bought online.
It is estimated the total annual sales from online shopping were more than 250 billion yuan ($37 billion) in 2009. About 80 percent of online sales were through Taobao.com, China's fast-growing e-commerce hub established in 2003, or 200 billion yuan ($29.3 billion).
The company predicts sales of up to 400 billion yuan this year.
Taobao, meaning "treasure hunt", is owned by Alibaba Group, parent of Alibaba.com, a global e-commerce site for small- and medium-sized businesses, connecting buyers with sellers.
Shi is one of the 159 million registered users at Taobao, where she can find almost anything she needs, from underwear to furniture, from candy to DVD players.
The biggest attraction for her is the relatively low prices for online goods, compared with those in brick-and-mortar stores. Her favorite facial cream costs 1,680 yuan ($247) for a 30ml bottle in the local shop, but a 10ml sample of the same brand costs just 68 yuan ($10) online.
"I bought three samples for 204 yuan plus a delivery fee of 12 yuan. I saved 1,464 yuan for the same product, same quantity and quality," Shi says.
The Taobao instant messenger, a communication channel for buyers and sellers, also facilitates online shopping and ensures the overall experience for both parties. Shi 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 chats with him or her through the messenger. You may receive some personalized service such as getting more samples or discounts," she says.
Yang Fei is also a Taobaoer, but the website is so popular at her workplace that it has been blocked.
"Now I can get a quick look on the website during the one-hour lunch break and quickly make my order," says 27-year-old Yang.
While some may question the security of online purchases, Yang gives Alipay, the thumbs-up. The Taobao payment method, launched by Alibaba Group in 2004, is run in partnership with the country's leading banks. She has bought more than 200 items online since she registered in 2007.
"It's very safe and convenient. Unless you confirm the arrival and are satisfied with the product the shop owner will not get the money. You can also get a refund if you want to return the purchase," she says.
"Online shopping provides a convenient and accessible platform for customers who want to shop for variety," says professor Lu Benfu, an expert on Internet economy at the School of Management, the Chinese Academy of Sciences. "It is especially viable given the current economic downtown."
China's growing Internet economy has demonstrated "not only sufficient confidence to withstand the financial crisis, but also promises substantial profits," Lu adds.
When Rong Rong opened a Taobao shop in 2004, she did all the packing and delivery herself. Now she has her own warehouse packed with four shelves of hair products and employs three assistants. She has earned herself a 720,000-yuan ($105,000) apartment and a 200,000 yuan automobile.
"On a really busy 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," says 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 tripled those 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 choosing products that suit their hair condition are also important," she says.
"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 of seeing your own business grow from scratch." She adds that due to her influence, her father, who is in his 60s, has started online shopping.
The growing purchasing power of China's online shoppers has been noted by traditional brands from home and abroad.
Xinhua Bookstore has an outlet on Taobao; Japan's casual wear seller UNIQLO 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 this year for Taobao is to facilitate the business-to-consumer platform. The website will help more companies sell products online," says Ma Yun, CEO of Alibaba Group.
To fight fake products sold on its website, the company has injected 100 million yuan for 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," says Jiang Qiping, secretary-general at the Information Research Center of the Chinese Academy of Social Sciences.
Alibaba CEO Ma is confident about the prospects of e-commerce: "Among the 2 billion parcels delivered across China (last) year, 1.2 billion were goods from Taobao. We're planning to provide online shopping experiences for a billion people around the globe."
