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E-commerce: New driving force of China's economy?

2013-12-31 15:48 CRIENGLISH.com Web Editor: Gu Liping
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2013 has seen e-commerce in China skyrocket, with the industry now becoming a major driving force for the country's economy.

November 11 or Singles Day is a relatively modern celebration of being single in China.

It didn't use to be a major event.

But Chinese online retailer Alibaba has changed all that in 2009.

That's when the company started introducing a variety of special offers available only on this date.

The scheme has been so successful it's helped boost online sales across the country.

This Singles Day the company generated nearly 6 billion US dollars.

The same number in 2009 was just 8 million.

Such growth in sales show the development of China's e-commerce sector, which is good news for those wanting to boost greater levels of domestic demand in China.

Premier Li Keqiang highlighted the importance of the e-commerce sector, speaking at an economic seminar earlier this year.

"The new type of information consumption, for example e-commerce, has generated more than a hundred trillion yuan in total revenue. It also created many jobs. By connecting these online marketplaces, many people can start their own businesses at low cost."

More than 2.2 million Chinese work in the e-commerce industry, which has created up to 16 million extra jobs in related sectors.

However, the explosive popularity of e-commerce has created new challenges for consumer protection.

A greater disconnection between buyer and seller and a higher degree of potential anonymity can create problems that previous laws did not address.

In October 2013 there was a major overhaul of China's consumer rights laws.

This means online shoppers can now get a refund if they are not satisfied with goods purchased online.

Another problem with the expanding demand of e-commerce is with delivery.

Delayed express deliveries have become a major complaint for online shoppers, especially during peak trading times, like November 11.

Many warn a slow delivery system hampers the development of the whole industry.

Julie Zhang is an analyst with market research firm iResearch.

"Different transport and road conditions may slow down deliveries to Chinese in 4th, 5th and 6th tier cities, along with rural areas. If these areas can't be reached, it will dampen people's desire to buy things".

Around 800 thousand couriers nationwide worked on "Singles Day" to handle some 300 million packages sent out from online shops.

To increase coverage of tough-to-reach regions, Alibaba is investing in Haier, a leading electronic appliance producer, with a well-established delivery system in rural China.

Jack Ma is the business portal's founder.

"It is not these figures that we are concerned about. We think it is what is behind these figures that matters. We are wondering if the figures showing what the market really needs can help Chinese companies grow. Instead of pursuing high figures, we want to put our energy into helping more companies transform and upgrade."

And insiders believe a rapidly modernising retailing industry, as well as increased cooperation with internet business is a trend that's going to grow.

Wan Donghui is the Deputy Secretary General of China E-commerce Industry Association.

"More and more companies in traditional industries along with more retailing companies are forging commercial models of OTO, which is from offline to online. For example, franchise stores are opening online stores and online platforms are cooperating with offline stores. I think the trend is, quite obviously, beneficial for everyone."

According to the Ministry of Commerce, among the top 100 Chinese retailers, over 60 have started their own online selling channels.

With that momentum, the country is likely to meet its target of reaching 2.95 trillion US dollars e-commerce transactions by 2015.

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