E-commerce becomes Chinese cottage industry

Wednesday, August 31, 2011 - 11:45 by Simon Crisp

Millions of entrepreneurs in China are leveraging the tools of e-commerce to offer safe shopping online to fellow citizens and expand their horizons for future prosperity.

According to a report from BBC News, there are over five million small businesses based entirely around the internet, operating out of small homes and even university accommodation.

Some start-ups simply buy bulk products from major distributors and then sell them on at bargain basement prices in order to turn a small profit and get their brands out there online.

There are pre-made e-commerce platforms such as Taobao, which offer hundreds of millions of different product categories and billions of potential items, all sourced from small-scale retailers who are looking to earn a little cash.

Seventy-five per cent of Chinese consumers who have access to safe shopping online visit Taobao, netting it 50 million unique hits each day, an intimidating and impressive statistic.

There are a variety of different reasons for Chinese people to take up e-commerce as a career, with the home working aspect appealing to first time parents and the chance for future success also a big draw.

Taobao is essentially a Chinese version of eBay, although this major western online auction house was actually beaten out of the market in China five years ago. Thus the minor retailers leveraging Taobao today are similar to those people who started to make money from eBay in the UK and elsewhere in the middle of the last decade.

The primary challenge facing anyone who wants to sell goods online in China is that few consumers are willing to trust unknown sites because fakery and fraud is rife. It is clearly more of an uphill struggle for these fledgling companies than it might be for an e-commerce firm getting a foothold in the UK, where the web is comparatively safe and retailers can be trusted.