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Consumers logging on for a bargain

PAN Tingting sells cosmetics online. She used to work for a cosmetics company but resigned to start her own business in 2007.

"I feel really content and fulfilled to see buyers give good remarks on my products and service and up till now the comments on my online shop are 100 percent positive. I'm very proud of that," she said.

"I didn't have much difficulty starting up my business since I am familiar with the industry, except for some tricky customers. My parents also supported me when I decided to become self-employed," she added.

The past year has seen an amazing advance in the country's online business, including business to business (B2B) and business to consumer (B2C) transactions. Online transactions, including consumer to consumer (C2C) and B2B markets, surged nearly 130 percent to reach 129.9 trillion yuan (US$18.85 trillion) in value by the end of 2008, according to a report by, a local Internet research firm.

Apart from, the market leader since 2006,, an online auction and transaction site owned by Tencent Inc, the domestic Internet portal, and, a joint venture formed by Tom Online and, domestic search giant also tapped into the market in early October last year by introducing, a new C2C platform offering selling and buying services to Web users.

The approach of Chinese New Year also sees a surge in online transaction as people who used to buy new year gifts and clothes for family and friends in department stores turn to online transaction.

"The economic turmoil didn't cool people's enthusiasm for online shopping," Zhang Yanping, an analyst with iResearch, said.

Its research showed that six out of 10 Web users chose to buy new year presents on the Internet. Statistics from showed that daily transactions of new year goods and presents surpassed 50 million yuan, and nuts and chocolates ranked among the top choices for buyers.

The price of a single item in an online transaction, however, fell with people becoming more prudent when choosing items. The average price for a single item sold on was down 40 percent from the same period last year.

"The economic turmoil makes people more cautious than before and the Internet is an excellent tool to seek for bargains as well as bringing business opportunities to those who are not satisfied with their occupation. One can make use of these free of charge C2C platforms to become self-employed," according to industry expert Miao Deyu.

"Looking for cost-effective products and services will become very popular in 2009," he added.

Domestic users are also more willing than before to use the Internet as a source of information.

Some 24.8 percent of domestic Net users, or 74 million of China's 298 million Net users, have used the Internet to purchase items in the past year, up 60 percent from the previous year, according to a report by the China Internet Network Information Center.

They not only buy daily necessities or sell unwanted items on the Net, but also use it to find useful information, including ticket booking, seeking for nearby restaurants and coupons offered by entertaining service providers., a Shanghai-based Website which provides platforms for people to post their own opinions about restaurants, has covered more than 400,000 restaurants in more than 300 domestic cities after nearly six years of operation. In 2006, it asked restaurants to put coupons on the Website and now it has cooperative business relationships with about 2,000 restaurants.

Real estate brokerages, traditional retailers, shopping malls and service providers are also tapping into the Internet, hoping to make use of the platform to attract customers.

A study by iResearch showed that what other people say about the merchandiser was the most important factor influencing other consumers.

"We'll be focused on providing an online platform for the service sectors in the domestic market," said Jin Jianhang, president of, a unit of the Alibaba Group.

"We will surely see Net users' daily habit changing under the circumstances of economic turmoil since they want to find better services at lower prices, and the Internet is the best place to find this information," he said.

In September, the Alibaba Group said it was to inject 300 million yuan (US$43.9 million) in in order to help build a more complete platform.

"It could take up to five years to make the platform fully integrated with annual investment at around 300 million yuan.

We'll continue to help service providers get their voice heard and by that we're hoping to create more opportunities for early startups in the service sector," Jin said.

"The Internet will speed up its cooperation with traditional retail business and even with marketing, finance and IT sectors in the future since the online population is asking even more detailed information about certain products and individual sellers," according to a research report by Analysys International.

"The driving force of the online C2C market is going to shift to traditional manufacturers and distributors compared to individual sellers."


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