China's E-Commerce Penetration to Overtake US this Year
With at least 300 million online shoppers and the rising urbanization rate, China's e-commerce penetration is forecast to overtake that of the United States this year, according to Swiss global financial services company UBS AG.
Erica Poon Werkun, UBS head for Asian Consumer and Internet Research, said China's rapidly growing online shoppers, improvement in payment systems and logistics, and high competitive online pricing, will propel the country's e-commerce penetration to become number one around the world.
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At present, Poon said China's online shopping sales hit two trillion Yuan (US $323 billion), accounting for about eight percent of the country's total retail sales last year, and could further grow this year with the introduction of faster network systems.
And with the Chinese government's urbanization plan, Poon said the number of online shoppers in China will grow tremendously, driving more retailers to bring their businesses online.
A recent survey showed that 7 out of 10 Internet users in China said they make online purchases on a regular basis, higher than the global average. Experts said the popularity of high-speed yet cheap smart phones and gadgets in the country will further drive the popularity of online shopping among Chinese consumers.
More Chinese also prefer to buy online because products sold online are cheaper than those sold in physical stores. The development of trusted online payment systems, including Alipay and Tenpay, also lure online buyers to make purchases.
While physical store owners claimed that e-commerce is slowly killing their businesses, Poon said these retailers need to ride on the opportunity of e-commerce by linking their physical stores to online shops, and transform their stores into showrooms, where customers can actually see and feel their products before making purchases through the Internet.
Physical retailers must adjust their strategies in order to survive and compete with the rapidly-growing e-commerce business in China, Poon said.