Online shopping in small cities boosts demand

HANGZHOU - For Wang Shun, a university graduate in China's less developed Guizhou province, shopping online is a delight as she tries to keep pace with the lives of those in big cities.

Whether it was brand clothing, craftworks or mobile accessories, she spent every penny of her Alipay account shopping online last year.

Alipay is China's biggest online payment system operated by the Alibaba Group.

On Tuesday, it released its annual figures, which indicated a robust growth of spending in small cities.

The number of Alipay payment users in small cities grew 64 percent year on year and the transaction volume increased by 68 percent.

According to the Alipay system, small cities - known as fourth-tier cities - are those other than the 140 big or medium-sized cities such as Beijing, Shanghai and Guangzhou. Prefecture-level cities in less developed regions, such as Wang's hometown Bijie, as well as county-level cities, are classed as fourth-tier.

Wang started shopping online two years ago, and her bill totalled 4,000 yuan ($794) last year. "I often bought things that could not be found in my hometown or items much cheaper than in department stores."

The exact figure of Alipay's transaction volume is not available due to commercial reasons.

However, the Alibaba Group announced last month that total transaction volume at the group's online shopping platform Taobao.com exceeded 1 trillion yuan by November, or 5.4 percent of the country's retail sales for consumer goods in 2011.

Experts expect the percentage will continue to grow rapidly, as China is still at an early stage when it comes to consumers shopping online.

According to a report released by the China Internet Networks Information Center on Tuesday, online shoppers reached 242 million by the end of 2012, a jump of 24.8 percent from a year earlier. Online shopping has become an important way to boost domestic demand.

However, Jiang Qiping, secretary-general at the Information Research Center of the Chinese Academy of Social Sciences, said domestic demand in small cities has not been boosted but activated by online purchases.

"The demand has always been there, and online shopping has activated such demand for its convenience, fashion and cheaper prices," said Jiang, adding that delivery problems should be addressed amid the online shopping boom in small cities.

Jack Ma, Alibaba Group chairman, said customers in remote towns or cities still find it hard to get what they bought due to an incomplete express delivery system.

"The advantage of online shopping will not be seen if the bought items are not delivered to households," said Ma.