Courting young, Chinese urban professionals

Zia Daniell Wigder | March 14, 2008, 11:56 AM

An interesting article came out in the March issue of STORES magazine on Chinese consumers’ purchase of US goods online. The article focuses on Alipay, a PayPal-like provider that boasts 56 million users in China (some one-quarter to one-third of the total online population). Alipay’s services enable its users to purchase from foreign retailers. According to the article,

“Alipay and [partner] PSP are targeting Chinese Urban Professionals. “Chuppies” are Internet savvy, love American goods and have disposable income.”

Indeed, while per capita income in China remains low - estimated to be around $6,000 per year in urban areas - spending patterns of young professionals differ from those in the US. US News & World Report put it this way:

“An urban "young white-collar" worker [in China] who earns as little as 5,000 yuan (about $625) a month typically still lives and eats with his parents and so may have almost 100 percent disposable income. It isn't uncommon for this demographic to save for months to buy a brand-name handbag or pair of sneakers for hundreds of dollars.”

Yet despite growing incomes and interest in US goods, expectations of the current Chinese online retail market should be kept in check: Consumer e-commerce in China remains a fraction of that in major global online markets. Estimates vary, but tend to put the B2C online retail market in China around $4 billion in 2007. That’s roughly one-tenth of the comparable Japanese market and just 3-4% of the market in the US.

Still, online spending in China is growing rapidly, as is interest in shopping from US sites. And it’s not just iconic American items that are attracting the Chinese consumer. In addition to athletic shoes and blue jeans, a 2006 study indicated the list of items Chinese consumers would like to buy from US companies also included DVDs, washer-dryers and moisturizer.