Taobao Report: China E-commerce Growing Fastest in Smaller Cities

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Taobao Report: China E-commerce Growing Fastest in Smaller Cities



A new report ranking Chinese cities according to online shopping development has found that e-commerce is growing fastest in the country’s smaller markets.

The report, released this week by Taobao Marketplace,estimated that the number of newonline shoppersin so-called “fifth- and sixth-tier cities” doubled in the past year. Meanwhile, the number of online shoppers in sixth-tier cities, the least developed according to Taobao, increased by 151 percent in the first half of 2012. “Although the e-commerce environment in the lower-tier cities is far from satisfactory, confidence in online shopping is on the rise as many e-commerce operators expand their footholds in these regions,” the report states.

The high growth may seem surprising, because China’s small cities, located mainly in the western and northern regions, are poorer than the country’s coastal megacities and often lack infrastructure such as widespread high-speed Internet access, decent road systems and reliable package-delivery networks. But comparatively high growth rates are easier to achieve when absolute numbers of users are low, so it is difficult to judge the significance of the results. Taobao did not report user numbers.

To create the ranking, Taobao divided 2,300 Chinese cities into six tiers, sorting them according to local economic development data, online population, consumption, income, Internet penetration and other factors. Four cities—Shanghai, Beijing, Guangzhou and Shenzhen—received the top “tier one” ranking for e-commerce development. There were 24 second-tier cities, among them Chongqing, Xi’an and Chengdu. The total number of fifth- and sixth-tier cities was 2,024.

Chinese E-CommerceTaobao
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