Recent research by consulting firm Boston Consulting Group, China’s Digital Generations 3.0: The Online Empire, reveals explosive growth of internet usage and e-commerce in China. It’s not such a big surprise for all of us, is it? For sure, we will love the figures disclosed below.

Chinese online retail sales are expected to triple to US$ 364 billion by 2015, which makes the Chinese the largest online retail market by that time, with close to 10% of retail sales occurring online. Thus far, there are more than 193 million online shoppers from an internet population of more than 700 million, and it’s more than 170 million than the U.S. currently has. Notably, this trend driven by more and more Internet users getting online to buy merchandise. This is growing fast, from 36% in 2011 to an estimated 47% of the Internet-using population in 2015.

In the Internet We Trust …

The “Big Three” of internet companies in China, Alibaba with e-commerce, Baidu with search and Tencent with messaging, are in the midst of consolidating themselves and moving into new fields. Interestingly, an increasing number of users put more trust on the Internet as their most trusted source of finding information, at 50%. Television ranked second with 39%, followed by newspapers at 15%. Young professionals and university students lead the pack with 70% and 63% respectively.

If we take a look at last year data, the average time a user spent online increased to 3.6 hours a day. So what do they do when online? Mostly interactivity and content. 79% converse through instant messaging, another 79% enjoy online music and 40% read e-books. What is the position of e-commerce then? It is the second fastest growing activity after micro-blogging.

With regard to the brand that dominates the consumer e-commerce space, unfortunately, the data provided was of two years ago. More products were purchased in Tabao than at the top five brick-and-mortar retailers in the nation combined, with 48,000 products sold per minute. But it already shows something significant.

Businesses Urged to Get Online

Offline and online commerce is like a coin. Companies are urged to have an online presence, instead of only relying on their physical establishments, so that they can engage intimately with customers when they spend their time online, and not just merely do hard selling. Twent percent of consumers say they do research online before buying offline. And this number is predictably growing in the years ahead.

In short, businesses may want to tap into current fascination of the people with the online experience to experiment with new ways to build relationships with the consumers. In particular, the popularity of social media and online video raise opportunities to engage with customers and develop new ways to monetize through innovative business models. Somehow, western companies usually find the Chinese market nearly impossible to penetrate. Or, even if they are successful, apparently there is no chance to dominate, given the prevalence of local brands.

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