China: online transactions rise against global downturn

Beijing - China's online shopping rose by 18.9% over the first six months despite traditional retailing's struggle to keep their customers amid the economic downturn, state news agency Xinhua reported on Friday.

The number of Internet shoppers increased by 14 million to 87.88 million, which remained the level with the latter half of 2008 of 18.5%, said Liu Bing, director of the Internet development research department under the China Internet Network Information Center (CNNIC).

The CNNIC, a State-run organization, released a report on Internet development in China in the first six months of 2009 on Thursday.

"People seemed to realize the advantages of online shopping amid the economic downturn. It is cheaper and more convenient," Liu said.

Taobao, China's largest online shopping site founded in 2003, reported an annual turnover of 99.96 billion yuan ($14.52 billion) in 2008, double that of the previous year, the company said in January.

But online shoppers, which has risen to 87.88 million by the end of June, account for only a quarter of Chinese Internet users, which soared to 338 million.

Compared with the ratio of every two thirds in Europe, the United States and South Korea, China still lags behind in the online transaction, CNNIC report said.

Liu believed the biggest bottleneck was security risks.

About 195 million Internet users were targeted by computer viruses in the past half year and 110 million had their user names or identities stolen, the report said.

"That's why only 29.2% netizens thought online transaction was safe," Liu said.

China needs to build a sound cyber environment, which is not only usable but also trustworthy, according to Liu.

Online retailers need to improve third-party payment accreditation and logistics, Liu added.

China's Internet users reached 338 million in June 2009, up 13.4% over the end of 2008.

But the Chinese netizens accounted for just 25.5% of the population while that ofSouth Korea totaled 76.1%.