China’s online retail sales is red-hot, reaching 801 billion yuan ($126.5 billion) last year, up sharply from 514 billion yuan in 2010, according to a report by China E-Commerce Research Center, an independent research institute based in Hangzhou.
About 203 million people shop online in China in 2011, up 29% from the prior year. In particular, group-buying websites are thriving and they number 3,909 websites in December, up from 2,630 in January last year.
Equally popular are complaints. The research institute received 25,000 complaints related to online group buying.
“At present, online shopping gets so many complaints because the country now lacks strict regulations and supervision of such service providers,” said Wu Xuefei, a senior researcher at the institute. Many of these complaints could be avoided if “group buying websites are required to clarify details on delivery, payment, exchange and the return of goods and services before trading.”
This may change soon. China’s thriving online group buying market may get more regulated to protect customer interests as well as stave off unscrupulous activities.
It could also ban unfair competition according to Wu. “Currently, many luxury goods are not authorized to be sold via the Internet. However, since there is a lack of strict regulations on overseas purchasing, some luxury goods are pouring into the domestic market and are being sold at lower prices through online group buying,” she said.
Changes will certainly help develop this popular industry further by providing more stability and credibility.
In 2011, 10.8 million consumers participated in group buying on Juhuasuan.com, the group buying platform of Taobao.com, with more than 10 billion yuan in sales, according to a staff member from Taobao.com.
Juhuasuan.com announced this month that they will use 50 million yuan to compensate consumers for their losses.