The Internet in China has gone mainstream. By 2015, China will have 700 million Internet users—about as many as in the U.S., India, Japan, Russia, and Indonesia combined. In 2011, Chinese consumers spent 1.9 billion hours a day online. That’s an average of 3.6 hours a day per user—about one hour more than in the U.S.
In order to understand China’s online market, companies need to look at it through the eyes of users. Among the eight segments identified in a BCG report on China’s digital generations, for example, younger users tend to log more hours on the Internet, but many are not yet spending large sums of money online. Seniors and rural residents are new to the online world but are rapidly making the Internet part of their lives.
China’s e-commerce market has its own local flavor that may confound Western companies. On Taobao’s consumer-to-consumer site, for example, more than 500 million products are for sale by more than 5 million merchants, with 50,000 sales per minute. In the West, consumer-to-consumer markets like eBay primarily sell secondhand goods. In China, most products sold on so-called C-to-C marketplaces are new.