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eCommerce and Internet Market Report

eCommerce and Internet in CHINA According to the CNNIC, Internet applications in China in mid-year 2009 may fall into four categories: information acquisition, communication, Internet entertainment and business transactions, basically covering specific applications like Internet news, online search, instant messaging, online games, online music, online shopping, online payment and online banking.

On the whole, the proportion of Chinese Internet users accessing the Internet for entertainment, information and communication purposes was high. Except for forum/BBS, the Penetration rate of the three Internet applications in Internet users was all over 50%. The level of application of business transaction remained low, and the Penetration rate of online shopping was 26%.

A free pdf copy of this Official report in English may be downloaded from the CNNIC wbsite.

China eCommerce and Digital Economy

China Digital Economy Overview
We are seeing increasingly rapid development of Internet businesses in China. The pace of development has really been quickening as more and more of the population gains access to the Internet. The development of online enterprise in China is showing strong signs of being innovative. This report looks at various aspects of the digital economy in China and includes statistics on e-commerce users and market size; a review of e-entertainment and various e-services such as on-line shopping, advertising and banking; an overview of major on-line companies, all driving the phenomenal growth of e-commerce in China. The report also includes an overview of Smart grid developments in China. See Table of Contents

Digital Economy, E-Commerce, E-Payments and E-Banking Overview
China has more Internet users than the USA in 2009 and these two markets, among others, now offer significant opportunities for those operating in the e-commerce space. While the economic slowdown is curbing e-commerce growth somewhat in most markets; there is evidence that so far the online retail market has remained steady due mostly to the lower prices offered via online shopping. Demand is also beginning to grow for alternative payment methods for e-commerce transactions, particularly in the developing markets. This report provides a global overview of the e-commerce market, including e-payments and e-banking. It also includes information on the emerging e-commerce market of China; USA and the leading online payment system, PayPal. See Table of Contents

China Telecommunications Reports

China Internet Indicators

China Search Engines and Directories:

China Search Engines Directory
China Search Engines and Directories.

Chinese top Search Engine.

China Profile by the BBC
The Asian Search Engine (in English).

China Factbook
China information from the CIA World Factbook.

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China Internet and eCommerce Information

China Country Briefing
The basic country profile from the Economist.

China Today
Data and Statistics for China.

China Travel Related Information
China population, geographical regions and travel information.

China Stats and Indicators
Useful information for market research.

China Economic Review
Useful business information from China.

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On July 16, 2010, the China Internet Network Information Center (CNNIC) reported 420 million Internet users in China. This justifies Chinese e-commerce developement 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, is shopping online, according to the CNNIC. "The rise of group-buying websites showcases the regional development of e-commerce," the report adds. Online retail sales increased 117 percent annually between 2007 and 2009, and they are expected to amount to 450 billion yuan this year, according to the research center of Alibaba Group, which runs the global e-commerce site Alibaba.com.

The Digital Divide between urban and rural areas is still obvious. The report shows that by the end of June 2007, the number of the rural Internet users reached 37.41 million. The penetration rate of the Internet for all 737 million rural residents is only 5.1%. Meanwhile, China has 125 million urban Internet users, with an urban penetration rate of 21.6%. However, comparing with the statistics of December 2006, the gap has been gradually narrowed. China had 23.1 million rural Internet users in 2006, with a penetration rate of 3.1%.

The main bottleneck is that at year end of 2006, every 100 households in rural areas possess only 2.7 computers, which is far behind the figure for urban areas (47.2 computers). Comparing with the figures for the same period in 2005, the computer number increased from 0.6 in every 100 rural households, while the urban households now have 5.7 computers more. The report also indicates their reasons for not using the Internet. The main reason is having no facility, which accounted for 39.5% of all non-users in rural areas, while this proportion in urban areas is only 26.6%. Due to the lack of household computers, 53.9% of rural users surf online in Internet cafes, resulting in a much higher figure that even exceeds the national average Internet café surfing rate of 37.2%. Insufficient Internet infrastructures in rural areas has become the major bottleneck that blocking the development of the Internet usage in Chinese rural areas.

Comparing with urban users, the application level of rural Internet users is less advanced. The report shows that 66.5% of rural users read online news, while the proportion in urban areas is 81.5%, which is 15 percentage points higher; 65.8% of the rural users use search engines while the rate in urban areas is 13 percentage points higher (78.4%). Besides, much less users in rural areas have ever touched online purchasing, online banking and online stock trading.

It was found in the survey that rural users and urban users have similar access level for online entertainment. The rates of listening online music, playing online games and watching online movies and TV series of rural users are respectively 68.9%, 47.1% and 60.9%, comparing to 68.4%, 47.0% and 61.2% of urban users.

The survey also involved rural migrants. The statistics show that rural migrant users reached 20 million and that most of them access the Internet in Internet cafes or through their mobile phones. For that matter, they averagely pay 86.6 RMB Yuan per month, that is 11 Yuan higher than the average level of the total Internet users (75 RMB Yuan) and even higher than the total non-student users monthly cost of 80.8 RMB Yuan.

In conclusion, along with the progress of rural informatization access in China, the Internet has become a substantial part of the building of a new-type rural area. 37 million rural users are bringing vast demand and real business opportunities. No one doubts the rural area in China will become a great Internet market.

For marketers wishing to penetrate this market, the following elements should be considered:

1. Web Site Design
This could mean simply a translation of Web sites into Chinese, or re-designing them completely in order to be culturally and aesthetically correct.

2. Search Engine Optimization (SEO)
Just like with English language search engines, users can increase their chances of being among the top hits on Chinese language search engines by altering and optimizing their web content.

3. Online Auctions
The world leader eBay has already entered the Chinese market, and there are other global Internet auction sites that marketers may want to use.

4. Online Advertising
China's Web sites carry advertising (including Google-like adwords) just like English language Web sites. You need local advertising to enter this specific market.

5. Online Public Relations
There are several Chinese print and electronic publications that receive press releases via email. This option should be considered for additional publicity.


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