China's E-Commerce Grew to $190B in 2012, Mobile Users and Social Media Drove Market

What do the over one billion more mobile users in China, the country with the world’s largest subscriber base, like to do with their devices? It is clear from a recent report by the China Internet Network Information Center (use Google (News - Alert) translate to see report in language of your choice) that one thing they favor is shopping online.  

As the report points out, China’s e-commerce market racked up a whopping 1.3 trillion RMB ($190 billion USD) worth of transactions in 2012. This was an increase of 66.5 percent over 2011.

The facts are impressive. In 2012, 242 million Internet users purchased goods online, and e-commerce transactions accounted for 6.1 percent of total retail sales of consumer goods. Growth was driven by mobile users:

• During the last half of 2012, 40.7 percent of online shoppers used a mobile device to browse e-commerce merchandise.
• 53.6 percent browsed a merchandiser’s mobile app instead of accessing its main website through their device’s Internet browser.
• 53.3 percent who used their mobile devices to shop said they did so while at home with many using their smartphones instead of their home PCs.
• 26.2 percent said they browsed items on their smartphones while at work or school.
• 10.6 percent said they spent their commutes or time waiting in queues to shop.

The survey also found that mobile and social media drove e-commerce sales. 41.8 percent of shoppers said they had first seen information or promotions for a product on a social media site before deciding to purchase it.

Other interesting news is in the expenditure numbers: 

• Shoppers spent an average of 5,203 RMB (about $843 USD), an increase of 1,302 RMB ($211 USD) – up 25 percent from 2011.
• The most frequently purchased items were clothing and shoes, 81.8 percent of which shoppers bought during the last six months of 2012.
• General merchandise was 31.6 percent of sales.
• Consumer electronics made up 29.6 percent of the total.

In a word, WOW!

It should also be noted that according to estimates, China is about to pass the United States as the world’s largest e-commerce country. In fact, online Chinese giant Alibaba’s two portals, Taobao and Tmall, together handled 1.1 trillion yuan ($170 billion) in sales last year. This is more than eBay (News - Alert) and Amazon combined.  

Alibaba, in particular, is on track to become the world’s first e-commerce firm to handle $1 trillion a year in transactions. Just to provide context for how big these portals are, Taobao a consumer-to-consumer (C2C) marketplace, has more than 800 million product listings and 500 million registered users. 

Alibaba says that Tmall, its business-to-business (B2B) site, has over 50,000 merchants.

The impact of mobile and social media is undeniable. What is fascinating, and something to literally and figuratively watch as people become increasingly wedded to multi-screen and multitasking in their homes, is how merchants evolve their strategies and tactics for the shift away from the PC as the shopping platform of preference. 

There’s an old saying in the U.S. that, “When things get tough, the tough go shopping!” In China, it seems you don’t have to be tough to go shopping. You just need to go online and enjoy the experience.