China's e-commerce sales last year hit a record 553.1 billion yuan (US$68.72 billion), an increase of 58 percent over 2004--and the momentum is set to continue this year says a new study.

The consumer-to-consumer (C2C) market has become the new growth market with a turnover of 13.5 billion yuan (US$1.68 billion) triple the 2004 volume according to the study released yesterday by the China Internet Development Research Center (CIDRC) under the Chinese Academy of Social Sciences.

Domestic online auction site Taobao.com, which has 70 percent of China's C2C market users and conducted transactions worth 9.7 billion yuan (US$1.2 billion) last year, has beaten the Chinese unit of US auction service eBay to become the No 1 C2C website in the country by offering free services.

As part of the study, a CIDRC survey conducted last December among 3,483 netizens in five Chinese cities Beijing, Shanghai, Chongqing, Xi'an and Jinan showed that by the end of last year, more than 71.3 percent of netizens had shopped online, while this proportion in the Asia-Pacific region stood at an average of 70 percent.

And about 95 percent of the respondents said they were optimistic about the future of online business, which indicated there would be continuous growth in coming years.

The great variety of goods available online and reliable payment methods are regarded as two major contributors to the increase, said Ma Haitao, a CIDRC researcher who led the study.

The number of items available online has exceeded 60 million in China, says the study. "Online shoppers are offered more alternatives which is a great stimulus to the market," Ma said.

Book, audio and video purchases topped the online shopping list, but sales of computers, mobile phones, digital cameras, mp3 players, airline tickets and accessories have also jumped.

The development of online payments, such as Paypal and Alipay systems, has eased worries about security. The survey shows that about 70 percent of online shoppers prefer online transactions to cash payments. Ma said the payment change would facilitate online trade and was "a landmark in
the development of Chinese e-commerce."

However, 43 percent of respondents expressed concerns over the quality of online goods and after-sales service.

Ma conceded that a lack of a supervisory mechanisms might hinder the development of e-commerce and a growing number of customer complaints were testimony to a growing trend.

The Beijing Consumers' Association announced that it handled 76 complaints about online shopping last October, an increase of 66 percent over the same period in 2004.

(China Daily February 20, 2006)