Mobile Shopping Soars in China as Smartphones, Shopping Apps Proliferate

Online shopping by mobile phone and tablet computers could be approaching a hockey-stick moment in China as the number of consumers embracing m-commerce soars.

According to a report released today by Taobao Marketplace and Tmall, China's most popular online shopping destinations, the total volume of merchandise purchased by consumers accessing these platforms via mobile devices soared 563 percent in the first quarter of 2012 compared with the same quarter a year ago.

The quarterly increase was a continuation of torrid m-commerce growth on Taobao Marketplace and Tmall in 2011, during which GMV (gross merchandise value) reached RMB 11.8 billion, up sixfold compared with results from 2010. The report said Taobao merchants recorded more mobile sales in the first four months of this year than in all of 2011.

While m-commerce still makes up a relatively small part of China's online shopping market, the report findings echoed forecasts by industry analysts, who have been predicting that China's mobile-phone users—there are an estimated 1 billion of them, compared to 450 million Internet users—would take to m-commerce in a big way as affordable smartphones and more user-friendly mobile-shopping apps proliferated.

In the past, people using their cellphones to buy goods and services in China shopped mostly for digital products such as ringtones and games, but that has changed. Taobao reported that physical merchandise accounted for nearly 75 percent of m-commerce sales last year.

Taobao projects annual mobile GMV will reach RMB 50 billion on its platforms in 2012. "Users are increasingly adopting a multiple-device approach to fulfill their online shopping needs and the Taobao companies recognize the need to continue enhancing usability and mobile functionality to keep up with this undeniable trend as smartphone, tablet and mobile Internet penetration continues to rise rapidly," said Taobao spokeswoman Florence Shih.  "We believe the m-commerce market will experience explosive growth in the next two years."

Market research firm iResearch estimated total transaction volume in China's mobile shopping market reached RMB 11.4 billion in 2011, a five-fold increase from RMB 2.2 billion in 2010.  By 2015, the market is projected to reach RMB 304.9 billion.

According to the Taobao report, more than 15 million new registered users accessed Taobao via mobile in the first quarter. Areas of the country seeing the fastest growth were Guangdong Province (1.65 million new users), followed by Zhejiang and Jiangsu provinces, both of which accounted for more than 1.5 million new users. The number of mobile transactions tended to peak twice a day from 8-10 am and from 6-8 pm, while people were commuting to and from work. Growth in first-tier cities such as Shanghai and Beijing was also strong.

The types of products being purchased by mobile shoppers were similar to those purchased by regular e-shoppers. Women’s apparel and shoes, consumer electronics, maternal and baby products, cosmetics and men’s apparel were the most-shopped-for items.

Taobao reported that 58 percent of m-shoppers used Taobao's shopping app for Apple's iPhone and iPad, while 42 percent used the company's Android shopping app.