Online Carnival (3)

A new way for growth

China has been trying to stimulate domestic consumption to boost growth and shift away from a substantial dependence on exports at a time when the global economy remains uncertain. The country's economy grew at a rate of 7.4 percent in the third quarter, its lowest quarterly rate in more than three years. Amid dwindling foreign demand and shrinking foreign direct investment, domestic consumption is increasingly seen as a way to facilitate growth.

Online retail sales accounted for 4.32 percent of total sales in China last year, up from 1.16 percent in 2008, according to the Ministry of Commerce.

Online retail sales accounted for 4.32 percent of total sales in China last year, up from 1.16 percent in 2008, according to the Ministry of Commerce.

"The online shopping spree in Tmall proves that Chinese consumers have a huge consumption potential," said Tmall President Zhang. "E-commerce can better tap this immense potential and a huge revolution in consumption could be the result."

Alibaba's Chairman Ma said online and offline retail in China has each taken a different path of development compared to that of the traditional retailer in the United States.

"China's retail infrastructure is not as advanced as compared to the United States, which gives e-commerce a chance to become mainstream and stimulate domestic demand, while logistics and other supporting facilities can improve and catch up," Ma said.

One factor explaining the Singles Day's spending binge, which generated in one day about as much revenue as three weeks worth of retail sales in Hong Kong, was an explosion in shopping among those who are usually reluctant to buy relatively higher-priced goods, Ding Ningning, a researcher at the State Council's Development Research Center, told China Daily.

"It's not that consumers can't afford to buy things," he said. "It's that prices are sometimes too high, which affects people's willingness to buy."

Ding said that the half-off deals encourages shoppers—especially young Internet users who are often less inclined to splurge on relatively expensive items—to make purchases online.

The number of Internet users in China reached 538 million in June, and the online shoppers account for 39.3 percent of the country's total population, said the China Internet Network Information Center.

"The rate is 70 percent in Western countries, which indicates China's large potential for online purchasing," said Jing Linbo, a researcher with Chinese Academy of Social Sciences.

Although exports once again rose in October, China cannot be sure whether its export growth will fully recover.

"China's economy cannot just count on hard-to-predict exports, while investment is influenced by policies and the macroeconomic environment. Thus, domestic demand carries more expectations to stimulate China's economy," Jing said.

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