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Online Sales Growing Rapidly in China’s Rural Areas

Spending among consumers in the country's poorer interior provinces saw the highest growth rates in 2013, according to Alipay.

SHANGHAI — Online consumption among consumers in China’s poorer interior provinces experienced the highest growth rates in the country last year, according to an annual spending report released by Alipay, e-commerce giant Alibaba’s electronic payment service similar to PayPal.

The Alipay Annual 2013 China Spending Report found that while the top provinces for online spending are still located in wealthier coastal areas, seven out of 10 provinces where e-commerce spending is growing the fastest are in the less-developed West. Guangxi experienced the biggest increase in online spend with a 156 percent growth rate in 2013 compared to the year before while Henan and Fujian came in second and third with 147 percent and 145 percent year-on-year increases respectively. Guangdong, a province on China’s southern coast, ranked first in terms of total amount spent online. The report did not specify spending amounts.

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E-commerce spending rates grew more modestly in the mature urban markets of Beijing and Shanghai, but they still logged double-digit gains. Beijing’s spending rose 84 percent while Shanghai’s grew 45 percent, according to Alipay.

Shopping online via mobile phones is also becoming more prevalent in rural areas. In 2013, the top 10 highest concentrations of Alipay mobile users were in rural provinces, the report said.

Analysts have forecast the growing importance of consumers in China’s rural regions as manufacturing moves to cheaper interior regions and the government continues to try to bolster domestic consumption across the country. According to a 2012 study from the Boston Consulting Group on consumption trends in China, roughly 75 percent of future consumers will come from lower-tier cities located in inland regions.