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Online Sales Boom
Cover Stories Series 2012> Online Sales Boom
UPDATED: December 3, 2012 NO. 49 DECEMBER 6, 2012
Online Carnival
China's online sales hit a record high on November 11, offering new hope in efforts to spur domestic consumption
By Zhou Xiaoyan
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BUSY SEASON: A worker at an outlet store listed on Tmall.com allocates cargo on November 11 (XINHUA)

Online retail sales accounted for 4.32 percent of total sales in China last year, up from 1.16 percent in 2008, according to the Ministry of Commerce.

"The online shopping spree in Tmall proves that Chinese consumers have a huge consumption potential," said Tmall President Zhang. "E-commerce can better tap this immense potential and a huge revolution in consumption could be the result."

Alibaba's Chairman Ma said online and offline retail in China has each taken a different path of development compared to that of the traditional retailer in the United States.

"China's retail infrastructure is not as advanced as compared to the United States, which gives e-commerce a chance to become mainstream and stimulate domestic demand, while logistics and other supporting facilities can improve and catch up," Ma said.

One factor explaining the Singles Day's spending binge, which generated in one day about as much revenue as three weeks worth of retail sales in Hong Kong, was an explosion in shopping among those who are usually reluctant to buy relatively higher-priced goods, Ding Ningning, a researcher at the State Council's Development Research Center, told China Daily.

"It's not that consumers can't afford to buy things," he said. "It's that prices are sometimes too high, which affects people's willingness to buy."

Ding said that the half-off deals encourages shoppers—especially young Internet users who are often less inclined to splurge on relatively expensive items—to make purchases online.

The number of Internet users in China reached 538 million in June, and the online shoppers account for 39.3 percent of the country's total population, said the China Internet Network Information Center.

"The rate is 70 percent in Western countries, which indicates China's large potential for online purchasing," said Jing Linbo, a researcher with Chinese Academy of Social Sciences.

Although exports once again rose in October, China cannot be sure whether its export growth will fully recover.

"China's economy cannot just count on hard-to-predict exports, while investment is influenced by policies and the macroeconomic environment. Thus, domestic demand carries more expectations to stimulate China's economy," Jing said.

Problems remain

The recent sales carnival is a test for the country's online payment systems and its ability to deliver products.

While the promotion helped increase the number of online shoppers in China, many complained of glitches and other flaws while trying to pay for their transactions.

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