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18 June 2013 Posted by 

The rise and rise of Bamboo capitalism

THE popularity of online shopping is skyrocketing in emerging markets. China leads the way with an e-commerce sector tipped to become the world’s largest during 2013, overtaking that of the US.

At the virtual checkout, cash register numbers are astonishing. In 2012, Chinese e-commerce giant Alibaba.com made world headlines when it rang up US$3.043 billion in sales on one day. Its parent company, Alibaba Group Holding, is lately valued at about US$65 billion with an expected IPO this year likely to be bigger than Facebook's.

China topped global consultancy A.T. Kearney’s 2012 E-Commerce Index of fast-growing e-commerce emerging markets, with Brazil in second place and Russia third. With a 78% annual growth rate since 2006, China’s online shopping market is expected to explode as the country's infrastructure improves and purchasing behaviours evolve.

Online trading is a key part of the private-sector “bamboo capitalism” flourishing in the communist state and it's growing faster than that of developed countries, aided by a consumer shop-fest on mobile devices and a proliferation of social media.

Mobile sales rose by 600% in 2012 on two of China’s biggest e-tail sites, Tmall and Taobao – both owned by Alibaba – to 57 million purchases. Taobao, a consumer-to-consumer (C2C) portal like eBay, features nearly one billion products and is one of the 20 most-visited sites globally.

Tmall, a business-to-consumer (B2C) portal a little like Amazon, helps global brands such as Disney and Levi’s reach into China where apparel and electronics are the top-sellers online.

The Internet Society of China (ISC) says e-commerce has developed fast in the country’s industrial, agricultural, transportation and financial sectors. Total online sales in China rose by 64.7% year-on-year in 2012, to $US210.4 billion (but still only 6.3% of total Chinese retail transactions), according to the ISC.

By comparison, US e-commerce sales rose at a slower rate in 2012 – by 15.8% – to $US225.5 billion, up from $194.7 billion in 2011 (7.6% of total retail transactions), according to the US Commerce Department. US mobile e-commerce sales rose by 4% in the US in 2012 to $24.7 billion, however, accounting for 11% of total e-commerce purchases.

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