2011-08-29 Chinadaily

Chinese retailers are paying close attention to the mobile commerce sector in the country’s large cities, and experts said the development of mobile commerce will depend on the development of Internet environment in China.

Figures from Analysys International suggested that sales revenue generated through purchases made by mobile phone reached 1.67 billion yuan ($261 million) in the second quarter of 2011, an increase from 880 million yuan in the same period of 2010. Twenty-seven percent of the 1.67 billion yuan was generated through transaction terminals installed on mobile phones, and the remaining 73 percent came through web transactions on mobile phones.

Mindful of the tremendous business opportunities in this market sector, retailers are investing heavily to promote mobile commerce in large cities such as Beijing and Shanghai. Yihaodian, one of the locally developed online shopping stores, has introduced “shopping walls” in about 70 subway stations in Shanghai and placed more than 500 advertisement boards in public areas in Beijing since late July.

Yihaodian is not the only company in China that’s targeting mobile commerce. Online retail giants including Taobao.com, 360buy.com and many others have developed mobile terminals for smartphones with iPhone, Android and Symbian systems. Figures from Analysys International suggested download volume for the 360buy mobile terminal reached 1 million in the first quarter of this year. Media reported that the daily revenue generated by 360buy through cell phones reached 2 million yuan in June.

Though mobile commerce is becoming accepted in China, experts said it would not pose a big challenge to traditional brick-and-mortar stores in the short term. “It can only be a supplement to the traditional distribution channel in the short term because businesses need to develop mobile terminals. It will take time,” said Chen from Analysys International. Meanwhile, not every consumer likes to shop without visiting actual stores.

Though the idea of mobile commerce has been widely introduced in China, industry analysts said its development may hit a bottleneck because the Web environment is not as good as in developed countries and the use of smartphones is not as widespread.

According to data from Analysys International, 16.8 million smartphones were sold in the second quarter of this year, up from 13.5 million units a year ago.