The most recent Business Week has an interesting article on the evolution of online payments in China. Until recently most Chinese online purchases are paid at the time of delivery, a process that is both expensive and inconvenient for merchants.
But now, business for China's online retailers is picking up. Consumer e-commerce in the country will top $1billion in 2007 and grow at an average of 34% annually over the next three years, according to the Internet Society of China, a trade group. While few Chinese pay with plastic, e-tailers are getting a big boost from dozens of online-payment systems offered by banks and outfits similar to the popular U.S. service PayPal (EBAY). Online payments by both companies and consumers are expected to triple over the next two years, to $24 billion, market watcher iResearch says. "There has been a lot of progress," says Hanhua Wang, head of Amazon.com's (AMZN) operation in China, Joyo Amazon. About 15% of Joyo's sales are now paid for online, double the level of two years ago.
Cash on delivery payments are unlikely to go away anytime soon, but things are changing fast (as they often do in China).
Read more:
China's E-Tail Awakening
by Bruce Einhorn and Chi-Chu Tschang
Business Week
November 8, 2007
