45% of Chinese online shoppers indicated that they make at least an online purchase once a week while 44% buy something from Internet between 1 to 3 times per month, according to a report by Acquity Group, a global brand eCommerce and digital marketing company.

 

Why Chinese People Buy Online?

The report found out about three major reasons – cited as the “Three Towers” why Chinese people choose virtue online stores over traditional brick-and-mortar storefronts: Affordability, Product Variety and Convenience (in order of importance). Consumers also consider quality, fun, the recommendations of friends and family, ease of returning goods.

As for consumer behaviors, Chinese online consumers generally tend to make small, impulse purchase, frequently.

The report also pictured China as the powerhouse to offer significant growth opportunities for US retailers given the Middle Kingdom’s huge population, strong forecasted GDP growth as well as rising purchasing power – China’s per capita consumer expenditure rose by 8% in 2010 signaling that the Chinese have money to spend – and are spending it, the report’s finding shows.

 

 

How Chinese Consumers Buy from Internet?

A large chunk of Chinese consumers (43%) stated that they discover new e-tailers through Taobao. And the channels through which consumers discovering new e-tailing sites include: online advertising (28%), friends (18%), social platform BBS (11%) and others.

Retailer’s reputation, product quality and price were the most important factors adopted by consumers to decide on buying from which e-tailer. Also, 64% of online shoppers said they prefer to compare multiple e-tailers before making an order while 36% just go to the e-tailer’s site and buy directly.

When deciding their e-tailer of choice, however, consumers stated that a retailer’s reputation, product quality and price were the most important factors in their decision. And while 64% of online shoppers said they prefer to compare multiple e-tailers before making a purchase, 36% simply go to the e-tailer they planned to buy from directly.

The consumer behavior explains Taobao’s spin-off of Etao. Price engine is seeing tremendous growth starting late last year as more and more ecommerce sites emerged upon the scene making it harder for consumer to find the best deal through numerous e-tailers.

 

Grand Picture of Online Retailing

Although lately an unbroken string of murky news broke the setbacks in China’s ecommerce companies, such as putting on hold IPO or shedding staff, it only speaks to these companies’ bonehead moves in blind expansion, lousy cost control and so on. That’s is all. Chinese ecommerce market, from another perspective, is still growing without any sign of slowing down. B2C eCommerce sales in China, excluding travel, are expected to increase from $6.9 billion in 2010 to $223.6 billion in 2015, a growth rate of over 3,140%, the report says.

It also reveals that the demand for retail and consumer products in China is expected to double from $40 billion in 2010 to $90 billion in 2014. And by 2015, China will account for 20% – $27 billion – of the rapidly growing luxury market.

 

“Payment Method Between the Primitive and Bronze Ages”

Alipay, the online payment arm of Alibaba has been long hailed as China’s Paypal, but still, many people choose to use cash when buying online. Cash on Delivery is among the most favorable online payment methods in China and is usually the first option listed at leading online retailers including 360buy and so on. Charing Credit card isn’t that popular as compared to that of the States (81% of online buyers in the US have completed their purchase using a credit card). That’s probably why it seems to Simon Cousins, CEO of Beijing-based PR and communications firm Illuminant that “usage of credit cards is employed to represent the development of a civilization, China is somewhere between the primitive and bronze ages.“