China’s Ministry of Commerce told the nation’s official news agency, Xinhua, that the People’s Republic will be the country with the most online retail volume in the world by 2013. U.S. e-commerce companies do not have much of that market, which is a parallel to search market share in the People’s Republic. Google (NASDAQ: GOOG) runs a distant second there to local search company Baidu (NASDAQ: BIDU). Speculation is that the central government has helped Baidu keep its place.
The MOC report on the matter said:
China recorded 194 million online shoppers and 782.56 billion yuan (123.72 bln U.S. dollars) in online retail trade by the end of last year, said Li Jinqi, director of the information technology department of the MOC, during a conference on E-commerce held in Beijing.
Those nearly 200 million people are more than the number of adults in the United States. And the e-commerce portion of the Chinese economy has recently grown by over 50% per annum.
Amazon.com (NASDAQ: AMZN), the largest e-commerce company in the U.S., eBay (NASDAQ: EBAY), the largest auction site, and Walmart (NYSE: WMT), the world’s largest bricks-and-mortar retailer, have a very small share of online sales in China, at least as far as their public documents show. These American firms obviously would like to be major online retail presences in China, because of both the size and the growth rate of their market shares. None of them have that major presence, though each has large enough sales and large enough marketing budgets to have a larger place in e-commerce in the People’s Republic.
Amazon has said that it is interested in increasing its sales in China. Its sales there have risen at a reasonable rate, according to its executives. But Chinese sales are nowhere near the portion of Amazon’s revenues that they would be if its penetration of the People’s Republic was more than very small.
At the current rate and in the current state, U.S. e-commerce firms have only at tiny part of the China e-commerce market. At this point, there is no sign that will change much.
Douglas A. McIntyre