Mobile Commerce is Booming in China

With ongoing advances in mobile Internet technology, ecommerce in China continues to shift from desktop computers to smartphones and other mobile devices, according to online payment service provider Alipay’s annual spending report.

From 2012 to 2014, the proportion of mobile payments to total payments in some of the country’s less-developed regions more than doubled, indicating consumers in rural areas and smaller cities are quickly adopting mobile devices as their primary tool for online shopping as more people in China have access to mobile devices and smartphones.

For example, in Tibet this year, more than 62% of Alipay payments came via mobile (up from 32.7% last year), the highest penetration rate out of all Chinese provinces and municipalities. For the country as a whole, the percentage of mobile transactions to total transactions was 54% this year, up from 22% last year.

The report also revealed that 42.3 billion payments were settled by Alipay over the past 10 years. During that period, the nation’s coastal provinces and first-tier cities have typically led the nation in terms of online spending volume. Shanghai and Beijing along with Guangdong, Zhejiang and Jiangsu provinces are the top regions, together accounting for just over 55% of total transactions settled by Alipay this year.

In terms of individual online spending, residents of the city of Hangzhou, Zhejiang’s provincial capital, were the most prolific. On average, Alipay’s Hangzhou users spent RMB 44,197 online for goods and services in 2014.

However, consumers in smaller cities and rural areas are increasingly part of the spending mix. For example, Alipay users residing in the Zhejiang Province town of Yiwu spent an average of RMB 65,160 online this year, the highest amount of any city, town or province in the country. Meanwhile, remote Western cities such as Lhoka and Shigaste in Tibet and Bortala in Xinjiang Province have for the past 10 years ranked among places where online spending is growing fastest in China. In the past decade, average annual online spending in Lhoka grew 600 fold while the average of Shigaste residents grew 145 times.

At the end of last year, there were 177 million Internet users in rural China, accounting for 28.6% of the country’s entire Internet population, according to the China Internet Network Information Center.

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