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The second pillar of Chinese e-commerce is the convergence of offline and online worlds.

This can be illustrated with an important example: the payment system.

Let's look at how e-commerce in China evolved in just a few years, going from virtually zero to over 700M users in a very short time.


The Exponential Growth of Chinese E-Commerce


At the beginning, only a few knew how e-commerce worked and few Chinese were purchasing online.

The initial payment systems included bank transactions, credit cards, and of course cash on delivery. These methods were enough for the small numbers of transactions taking place online.

As the number of sellers and buyers started to grow exponentially, these payment systems were no longer adequate to support the growing number of consumers purchasing online.


How Alipay Became So Successful


Therefore, in order to support the growth of e-commerce platforms had to create their own infrastructure and one of the best examples of this is Alipay, an alternative payment system created by Alibaba.

Alipay experienced huge success as an online payment system because it resolved the critical issue of trust between buyers and sellers, using an escrow account as the solution.


Convergence Of Offline And Online


Over time, this payment system has become so good that, even if it was originally created for the online world, it is now used more and more in the offline world as well.

We now see Chinese going into physical stores to purchase groceries and settle via Alipay instead of cash.

This is a great example of how the offline and online worlds are converging into one.


This video is a free excerpt from Your Introductory Course on E-Commerce in China and Why It Matters to Your Business

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