E-commerce, the fuel driving China's economy
- By Giovanni Vimercati
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E-mail China.org.cn, February 4, 2014
As the Chinese economy now slides from a manufacturing-based to an "immaterial" industry (soft power will play a crucial role in years to come), the lucrative possibilities offered by the Internet are coveted assets. Over the past few years, China has actually come up with its very own version of Apple (Xiaomi), eBay (Alibaba) and Twitter (Weibo). The online economy is booming and yet again is seen as merely aping their counterparts in the West. One aspect in which both business models differ for sure is their sheer number of transactions.
In 2012, for example, Alibaba sold more than eBay and Amazon combined. Recently, that same Chinese web firm struck a deal with a social media company that runs a Twitter-like service. Unlike in Europe or America, social media users in China possess considerable spending power and that would explain why Alibaba was so eager to join forces with a social media company. People on social media tend to be young both in China and in the West, the only difference being that the Western youth is currently the most cash-strapped generation since the end of WWII.
Their presence on social media is of course monetized, but mainly through data-mining that does not directly translate into profit. They are like a huge focus group, all free of charge. In China, on the contrary, the same people who are on social media also happen to be avid consumers, the first generation of Chinese to be born into the economic miracle so very inclined to spend. Older generations of Chinese in fact, even when they became wealthy, do not share their children's consumer fever.
This is easily explained; China's older generations often hail from very humble backgrounds and therefore tend to remember what it's like to be starving. It follows that younger generations want to get as far away as possible from the poverty their parents saw and in many instances experienced firsthand. We might call it a kind of consumer redemption, exorcising poverty by buying.
This newfound attitude is gold for e-commerce giants such as Alibaba, who are in fact going to find their new customers right where they can be found, online. Young Chinese sharing shopping tips on their smart-phones are the golden gooses of the e-merchants who can always count on their stuffed wallets. Unlike in the democratic West where young people have less and less money… Who knows, perhaps in a few years time anti-consumerism will become a Western value -- one out of necessity. Meanwhile e-commerce and social media will probably fuel the passage of the Chinese economy from a manufacturing, investment-led one to a consumer-driven one.
The author is a columnist with China.org.cn. For more information please visit:
http://www.china.org.cn/opinion/giovannivimercati.htm
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