e-commerce trigger

The other side of the online coin in China shows up in a People's Daily Online piece today. For some years, received wisdom has been that online transactions in China were going to be slow starters because not many people had bank cards. This piece suggests that there are now 875 million cards in issue in China, that they account for 30% of retail transactions in the more developed cities and the gross transaction volume on those cards was Rmb24 trillion (US$2.9 trillion) in the first six months of this year. Given that China's total annual GDP is around $2 trillion, I fear for a misplaced decimal point in that last figure but the basic point is clear; limited numbers of cards can no longer be considered a significant restraint on e-commerce in China.

Having been watching this market for 20 years, I often tell clients that there is one mistake I have repeated more often than most: that is underestimating the speed at which things change in China. If you find yourself saying "it will be years before xxx happens...", beware. Six months later, you'll probably find it going on all over the streets of Shanghai and Shenzhen.