China: 1.3 Billion People; 2 Million Credit Cards

This Reuters article illustrates some of the greatest obstacles to expanding into new markets: payment and fulfillment.

Localizing a Web site can seem downright trivial when compared to navigating complex finance laws and regulations, selling to people who don’t have credit cards, and delivering products when there are few reliable services. Welcome to China.

Here are some interesting stats from the article:

  • China’s online shopping market was worth 4.2 billion yuan ($507.5 million) last year and is expected to double this year, according to market research firm Shanghai iResearch.
  • Only 10 percent of China’s estimated 90 million-plus Web surfers buy things on the Internet, compared with 38 percent in the United States, according to industry executives.
  • Global Internet giants including eBay, Yahoo, and have all taken the China plunge in the last year, paying a combined $375 million to acquire domestic start-ups.
  • The nation’s credit card holders now number a scant two million, a fraction of its 1.3 billion people.

eBay, which is already in China, is close to launching PayPal in China, which will help fuel ecommerce in the country. And China Post appears to be opening the courier business to the likes of DHL, UPS and FedEx.

When going global, companies need to look well beyond their Web sites.

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