As the world’s largest Web and smartphone market, China has become a hotbed for mobile commerce. More than 140 million Chinese are using mobile devices to purchase goods and services, and with demand soaring, e-commerce companies like Alibaba Group are investing heavily in mobile payment and shopping apps to keep up.
You might expect that the most active m-commerce users reside in China’s wealthy coastal mega-cities, but the truth is more surprising. According to an Alipay report released in January, the regions with the highest mobile payment penetration rates are all in China’s far-flung Western provinces like Tibet, Inner Mongolia and Qing Hai.
Mobile commerce’s high penetration rates in these rural areas is due primarily to issues relating to access to technology. The regions’ poorer residents can’t afford personal computers and even if they could, Internet bandwidth is so constrained their online experiences would suffer. Cellular networks offer better coverage and decent speeds. Little wonder, then, that Chinese government Internet statistics released in January showed that most of China’s new Internet users last hailed from rural areas and more than 70 percent of them were accessing the Web using their mobile phones.
“Many of these people living out in the farms and rural areas like farmers and migrant workers, they don’t have computers, so in the most remote and most underdeveloped places in China, you will find more smartphones than computers,” said Chen Liang, a mobile commerce researcher with AliResearch, the research institute arm of Alibaba Group.
According to the government report, while 55 percent of urban families in China had Internet broadband access only 20 percent of rural families did. Internet speeds also differed significantly: A majority of urban users enjoyed speeds of 20 megabits per second (mbps) compared with rural users who experienced Internet speeds only four mbps.
The countryside’s slow and spotty Internet access has given a huge boost to mobile shopping, as China’s e-commerce websites tend to be image intensive, leading to slow load times on personal computers.
Jiang Ba, a 25-year old Yushu resident who runs a photography business, says he can’t find the materials needed for his business in the town’s stores and buys most of the items he needs for his business from Taobao using his smartphone.
“I buy my backdrops, my photography materials, all my decorations from Taobao. You can’t find those items in Yushu and with mobile shopping, everything becomes very convenient,” said Ba.
This convenience factor has boosted the number of mobile payment users to more than double 2012 levels and caused the number of mobile shoppers to grow a whopping 160 percent to 144 million users in 2013. Two-thirds of mobile shoppers saying they shopped on their mobile devices because they lacked computers at home.
“E-commerce is driving consumption in the West and central China. With rising smartphone penetration you have this trend where people naturally seek to shop online using their mobile phones.” Chen said.
