Chinese consumers have outpaced the rest of the world in the adoption of digital payment systems, including QR codes and mobile payments, according to new research.
Nielsen, an international market research firm, polled 13,000 respondents in 26 countries to determine consumers’ e-commerce spending patterns. According to its Global Connected Commerce report, 86 percent of Chinese respondents said that they paid for some online purchases during the past six months via digital payment systems, compared to an average of 43 percent of respondents for all 26 countries surveyed.
Some believe that the success of China’s digital payment scene is due to the trust consumers already have in the established system. “China is an extremely mature market for online payments, with a plethora of very successful homegrown systems with established consumer networks. This is an obvious challenge to traditional, international payment systems like credit cards, or international digital payment systems like Apple Pay,” said Andrea Fenn, founder of Fireworks, a digital consulting agency specializing in the fashion and luxury industry.
The report noted that popularity of digital payment in China far surpasses other traditional methods, a situation that is unique to China. Only 53 percent of Chinese respondents said they shopped online during the past six months with direct debit from a bank account, whereas 49 percent paid cash on delivery, and 46 percent of respondents shopped with a credit card.
The survey also claims that a “prevalent” 98 percent of Chinese respondents have made purchases online. However, the findings of the Chinese survey were based on an online survey.
In terms of online purchasing, the survey shows that most consumers still prefer to use their desktops or laptops, with 72 percent of online fashion related product transactions being completed on a computer.
Mobile commerce is picking up, especially for beauty products, with 46 percent of purchases being made via smartphone, according to the report. The use of mobile devices to make purchases in general was significantly higher than the average of the surveyed countries.
International brands and retailers also fared well, with 58 percent of Chinese respondents, who made an online purchase in the past six months, saying that they bought from an overseas retailer. Fourteen percent of respondents said 10 to 19 percent of their online purchases over the past six months were on overseas retailer Web sites.
“Cross-border e-commerce is a game changer because it allows new platforms and brands to penetrate the market without having to deal with the cumbersome organization previously required to enter China. It also significantly lowers official prices of products, especially luxury and fashion, so that the opportunity cost of purchasing products on official e-com channels as opposed to go through import agents [daigou], is lower,” said Fenn.