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China Exclusive: China's e-commerce development delivers whopping bills

Source:   Time:

BEIJING, Jan. 17 (Xinhua) -- Eye-watering shopping bills sent to online customers this week provided more evidence of rapid e-commerce development in China.

Alipay, the country's largest third-party online payment platform and subsidiary of Internet firm Alibaba, sent its hundreds of millions of users personal shopping bills which detailed their spending in 2013.

Chinese social networking site Douban encouraged shoppers to divulge their Alipay bills to their friends on the site. Some of the bills led to raised eyebrows.

So far, the top spender is a Shanghai resident whose bill was 9.01 million yuan (1.48 million U.S. dollars) via Alipay last year, with 80 percent on shopping.

Many other shoppers loosened their wallets.

"I didn't expect to receive such a huge bill," said Tang Xiaojie, a postgraduate student in Changchun, capital city of northeast China's Jilin Province. Without a regular income, she spent more than 7,700 yuan.

Alipay released the "2013 National Shopping Bill" on Monday, saying the annual average per capital expenditure of its users for the first time exceeded 10,000 yuan, including consumption in online shopping, money transfer, debt repayment and fee payment.

Government data showed a Chinese urban resident earned an average 24,500 yuan in 2012.

The consumption figures support the view that China will become the world's leading online retail market.

"There's no doubt that China will overtake the United States to be the largest online retail market," said Nie Linhai, deputy director of the department of electronic commerce and informatization under the Ministry of Commerce, at an e-commerce forum held in Shanghai last month.

Nie said the transaction value of e-commerce in the country last year was expected to hit 10 trillion yuan, including 1.8 trillion yuan from online retailers.

China's e-commerce industry has seen an average annual increase of 30 percent since 2006, government statistics showed. A November report from management consulting firm Bain & Company said the country's online retail market has grown 71 percent annually since 2009.

Online shopping does not simply mean changes in the way of purchasing and payment, said Qi Xiaozhai, lead researcher with the Shanghai Commercial Economic Research Center. "It has also generated new and huge demands, particularly in third and fourth-tier cities," Qi said.

Traditional companies will fall if they refuse to transform, Nie said, "Kodak's film and Nokia's cell phones are examples."

In addition to traditional retailers, banks are also jittery about Internet firms, as they have made forays into the finance industry.

In June, Alipay and Tianhong Asset Management Co., Ltd launched a personal finance product named "Yu'E Bao (Leftover Treasure)", which has amassed 250 billion yuan in aggregate deposits from 49 million users.

Thanks to this cooperation, Tianhong Asset Management has displaced China Asset Management Co., Ltd to become the country's largest fund company in terms of assets.

Traditional financial institutions should keep pace with information technologies and users' changing demands, which inevitably requires cross-platform cooperation, according to Mo Daiqing, an analyst with China E-Business Research Center.

In addition, observers said big data technologies that Internet firms boast have also made them formidable rivals to traditional businesses. For example, Alipay has acquired information about its users' age, gender, location and shopping habits.

"Advertising services based on personal consumption habits are very likely to change the future of shopping online," said Ding Zhaoyong, an associate professor in economics with Jilin University.

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