China Trend Analysis IV: Economic Trends, E-commerce

Part III: E-Commerce in China

As of the posting of this message the total number of Internet users in the People’s Republic of China was totaled at 253 million. This number was reached after a growth of 90% from the previous year, and put the number of Internet users in China as largest in the world.

The short history of China’s Internet usage began in 1995 when China first came “online.” In mid-1995 ChinaNET, a commercial service provider in China, opened up access to the Internet to private individuals, and in the first month about 900 accounts were opened. By the end of 1998 there were nearly one-and-a-quarter million subscribers across four networks, and projected growth was that the number would approach 2.7 million in 2000. In actuality by 2000 China's Internet user population was estimated between 17 and 20 million. By the end of 2005 the Internet population had grown to over 110 million users, and continued rate of growth brings us to the current day number quoted above. Analysts examining this growth are now expecting China’s Internet population to grow above 490 million by the year 2012.

However, to date the Internet has been a dormant economic boom for the PRC. A boom that is starting to stir. In 2000 e-commerce took in sales of approximately $62 million (USD). By 2006, that number had grown to $4.3 billion. In 2007, a total of $8.25 billion was reached, and the Research Institute Data Center of China Internet reports that in the first half of 2008 over $37.5 billion has been spent.

China’s surging online population, coupled with the rapid rise of on-line consumer confidence may make e-commerce in China a leading factor in the future of its economy.