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China’s investment in the internet

November 3, 2015 by in category News with 0 and 0

E commerce has proven to be immensely successful in China and has had a huge impact on their economy. There are several reasons for this, including the huge population and the favourable policies the Chinese government have introduced to encourage and support businesses. Internet companies in China are able to compete on an equal footing with Western companies because there are fewer barriers and the market is newer. In traditional retailing, businesses from the West generally have a competitive advantage, but ecommerce has opened up a whole new world of possibilities for Chinese businesses.

The success of internet companies in China can be seen quite easily by looking at the top ten in the world based on their market value. Four of these are Chinese companies with Alibaba, Tencent, Baidu and all performing fantastically.

In China it seems more and more people are making the shift to shopping online every year. In 2014 there were 361 million online shoppers according to China Internet Network Information Centre (CNNIC). This represents 55.7% of shoppers in the country. Online sales accounted for an impressive 20% of the total consumer demand.


China is embracing the possibilities of online shopping

According to the latest reports, e commerce sales in China in 2014 accounted for 7% of the country’s GDP (gross domestic product). This is an impressive number, putting it on par with a number of much older industries. It is even more astonishing when you consider that China has the second largest economy in the world; 7% of this is a massive number. The potential growth in the sector is also impressive, which is why the government has chosen to give it so much backing.

The performance of e commerce in China is further evidence that it has a major role to play in the future of retailing. It has already brought big changes and fantastic opportunities, but it will be interesting to see what developments will occur in the coming years. Businesses around the world should seriously consider whether they are positioned to benefit from online shopping and if they are making the most use of the medium.

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