Fan Huiwen writes for the China Economic Net on the gaining popularity of shopping online...
Online shopping gets popular with ordinary folks
By Fan Huiwen
In recent years, the e-shopping via Internet has been developed rapidly and has become an innegligible component in the e-business. E-shopping is a kind of online purchasing behavior of terminal purchasers, and consumers' shopping occupies most.
The fast development of e-shopping indicates that the core of e-shopping begins to transfer from B2B (business to business) to B2C (business to consumer) and C2C (consumer to consumer), and the e-shopping shows a new trend of popularization.
For most of e-shopping, commodities will be chosen online, purchase orders will be signed and commodities will be delivered to customers' doorsteps via logistics distribution, so the transaction cost is low, the e-shopping is convenient and prompt, and consumers will save the time of looking around marketplaces. As there is no need to rent storefronts for online shops, the operating cost is low and the price of commodities is relatively low, which enable purchasers to enjoy benefits. In large cities with a relatively high Internet penetration rate, e-shopping is more and more favored by people and becomes a fashionable life style quickly.
For the moment, China's e-shopping market is provided with the following characteristics: Firstly, the e-shopping scale keeps enlarging. According to related statistics, by the end of December 2007, the proportion of netizens' online shopping in China is 22.1 percent, and the purchaser population achieves 46.4 million. And the online shopping proportion of such netizens with Master degree or above has reached 56.5 percent. The scale of e-shopping market is RMB56.1 billion yuan with the growth rate of 117.4 percent year on year. This indicates that the penetration of Internet drives a rapid growth of e-shopping. E-shopping websites keep improving transaction modes, and consumers' acceptance degree to the e-shopping is enhanced increasingly.
Secondly, the transaction amount of B2C and C2C accounts for the most part of the total transaction amount of e-shopping. E-shopping contains the purchasing of terminal consumers and the commodity transfer between consumers, as well as the online shopping of part of manufacturing operators. In 2007, the transaction amount of China's C2C e-shopping hit RMB51.8 billion yuan, up 125.2 percent than the one in 2006. The transaction amount of taobao.com took up 83.6 percent of C2C e-shopping, paipai.com ranked No.2 with the transaction amount of 8.7 percent, and eachnet.com ranked No.3. In 2007, the transaction amount of China's B2C e-shopping hit RMB4.3 billion yuan, up 92.3 percent than the one in 2006. The transaction amount of dangdang.com ranked No.1 with the transaction proportion of 83.6 percent, joyo.com ranked No.2, and 139shop.com No.3. This illustrates that consumers' purchasing takes up a main position in the e-shopping.
Thirdly, the commodity scope of e-shopping is expanding increasingly. The early joyo.com and dangdang.com mainly operated books and video products. In recent years, their operation scope has been enlarged continuously, till now; joyo.com has expanded its commodity scope to 20 classifications and more than 700 thousand types. Except selling books, magazines and videos, dangdang.com is also involved in selling mobile phones, cosmetics, garments, shoes and hats, whose commodities have been rich in variety. The commodities of e-shopping have also broken the restriction of only providing tangible commodities, and expanded to digital products and services, so many professional websites supply the commodities in terms of digital content and network service.
Additionally, female consumer products occupy an important position in the e-shopping market. With the gradual transferring from e-shopping commodities to life consumer products, such female consumer products as cosmetics and garments become well-selling commodities. According to the statistics, the transaction amount of e-shopping of Shanghai netizens in 2007 is RMB7.01 billion yuan, ranking No.1 in China. And the commodities purchased by the Shanghai e-shopping group most are such female beauty supplies as cosmetics and perfume. Meanwhile, the commodities with the greatest quantity growth of e-shopping in Shanghai are female underwear and lady-used cases and bags; these data throw out female e-shopping group's scale of purchasing power. The female consumer product market is being paid more and more attention to by e-shopping websites.
With the popularity of Internet in the future, China's e-shopping transaction amount will keep a rapid growth, C2C will keep being the main driving power for the e-shopping growth, the commodity variety of e-shopping will be enriched further, and the attraction of online shopping communities to network subscribers will be stronger and stronger.
According to the research of CCID Consulting, by 2010, China's e-shopping transaction amount will be close to RMB400 billion yuan with the annual growth rate of above 60 percent. The driving factors of the rapid development of e-shopping include: a fast economic growth and a further improved residents' consuming level; Internet popularization and netizen increase in the second and third line cities; gradual classification expansion of e-shopping commodities; the participation of such new operators as baidu.com; the improved safety environment in terms of payment, logistics and online shopping, etc.
At the same time, on the present basis, the classification of e-shopping commodities will expand to all commercial fields. Seen from the hotspot and the trend in e-shopping market, the classification of e-shopping commodities will be enriched on the basis of such classifications as books and magazines, videos and music, mobile phones, cosmetics, and garments. The online reservation for various commodities and services just start to expand. The online group purchasing develops rapidly. Such commodities as consumer durables (such as autos), consumer products with a huge amount (such as houses) and luxury products (such as diamonds) also start to play important roles in e-shopping. These commodities will show an obvious elevation function for the sales volume of e-shopping.
What's more important is that the attraction of online shopping communities to network subscribers becomes stronger and stronger. Investigation indicates that more and more online consumers have begun to conduct transaction from purely via B2C platform to via C2C platform, and the trend of B2C subscribers' transferring to the C2C community is evident.
So to speak, the e-shopping represents the development orientation of commodity transaction in the information era, and China's e-shopping is very promising.
(The author is Director of Informatization Research Center of China Center for Information Industry Development)
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