Already home to the world’s largest population of Internet users, China now has 145 million online shoppers—second only to the U.S., with 170 million e-shoppers. (See Exhibit 1.) Online spending in China is expected to surge over the next five years as personal incomes and comfort with online shopping increase. As a result, the size of the country’s e-commerce market could reach RMB 2 trillion ($315 billion) by 2015, surpassing even that of the U.S. And nearly half of China’s urban consumers, accounting for about 80 percent of the country’s GDP, will be shopping both on- and offline within the next five years.
The Boston Consulting Group recently surveyed more than 4,000 online shoppers in China. According to an upcoming report on the survey’s findings, experience is a key driver of online spending, even when income levels are factored in. Within five years, most of today’s online shoppers in China will be experienced, and their average online spending per year will nearly double to RMB 6,100, or about $940—close to the U.S. average of $1,000 per year. As their sophistication increases, their needs will change. No longer just bargain hunters, more and more of China’s e-shoppers are looking for unique products, better service, and an engaging online experience. This is especially true for the country’s heaviest online spenders—consumers who purchase a wide range of products online.
Before jumping in to grab a slice of the pie, however, foreign companies must develop a customized online strategy that accounts for the unique behaviors, demands, and challenges of China’s e-commerce shoppers.