Will Plastic Become Fantastic?
Credit Card Use, Internet Shopping Rise in China

Credit cards and online shopping are gaining prominence among urban Chinese consumers, creating new opportunities for American businesses. In a UPS survey of 1,200 “Chuppies” – Chinese, urban, middle-class consumers – more than half (52%) use credit or debit cards for shopping, and 40% have shopped online.

Of those surveyed who have credit cards, 84% expect their usage to increase or remain the same in the coming year. Not surprisingly, credit card usage is more prevalent in large cities, especially in Beijing, where 47% of consumers plan to increase their credit card use.

Consumers in large cities also are the most likely to shop online. Comparatively more consumers in Shanghai, Beijing and Guangzhou shop on the Internet than consumers surveyed in other cities.

Even as more Chinese consumers say they shop on the Internet, 73% of those surveyed report that they do not have access to American products online. Some say this may be because of technical issues.

“Online shopping in China is still very new and there are many kinks still to be worked out, including simplifying payment and delivery,” said Erin Ennis, Vice President, U.S.-China Business Council. “American companies need to consider offering Web sites in the local language to increase their online sales.”

When they shop online, urban Chinese consumers buy books, music or DVD/videos the most, with 45% of online shoppers buying goods from this category. High income respondents buy the most items from this category, with 58% of consumers who earn 10,000 RMB or more per month (approximately US$1,250) reporting that they buy books, music or movies online.

Other popular product categories for online purchases include consumer electronics and apparel. In fact, the number of consumers who report buying apparel online jumped more than 60% (from 16% in 2005 to 26% in 2006).

This year, more consumers report that they shop online at home. In 2006, 72% of consumers surveyed said they surf the Web on their own computers, compared to 59% in 2005.