Internet shopping

Internet shopping has offered new opportunities for Chinese businesses and consumers but the full development of electronic commerce in China is hampered by a number of key structural obstacles. Although the Internet was launched in China in 1987 and saw large-scale user growth from the mid-1990s onwards (see Internet (history and structure)), substantive online shopping was not feasible until the end of the decade and into the 2000s. Chinese Internet users saw great shopping potential in the new technology early on. However, by the end of 2001, they had become more experienced and more realistic, with less than a third claiming to have made a purchase online in the year (CNNIC 2002).

Internet shopping has great potential in China considering the size of the country and the size of the market. Yet up to 2002, few e-commerce businesses had actually made a profit. Indeed, many online start-up companies went out of business between 2000 and 2002 as Internet fever cooled.

Internet shopping has been helped by a steady growth in the use of debit and credit cards in China (around 385 million in early 2002). However, credit limits remain low, Chinese surfers have real concerns about online security and are wary of being sold substandard or damaged goods. The most popular form of payment remains cash on delivery. The post office in China is gradually adapting to the delivery needs of e-commerce but long delivery times and damage to goods remained problems in 2002. Consequently, the most vibrant growth in online shopping has been in the areas of books, music and video—items that are relatively cheap, easy to deliver and indestructible. They also cater to the interests of Chinese Internet users who are predominantly young, low-income earners or students.

Further reading

CNNIC (2002). Statistical Report of the Development of the Internet in China (2002/1). Beijing: China Internet Network Information Centre (CNNIC).

KEVIN LATHAM