Browse, Click, Buy - Domestic Consumers Head Overseas with Online Shopping

By staff reporter LI YUAN

INTERNET shopping, the phenomenon that has revolutionized the way Americans and Europeans purchase, is finally hitting China. Propelled by the young, Internet shopping is recognized by China's increasingly large middle class for what it has always stood for: convenience, choice and discounts, discounts, discounts.

Ouyang Weiping, a Beijing local, decided to take a virtual walk down a digital shopping isle recently. Drawn to cosmetics, she immediately discovered that Macy's Department Store offered her favorite brand at a Christmas discount price far cheaper than at local stores. Three weeks later, her beauty bundle arrived at her office and included a bonus Christmas gift. Ouyang admits to being won over by her experience.

Digital Trump Card

An increasing number of Chinese consumers are taking to online shopping services provided by overseas retailers. For example, letsebuy.com, an overseas shopping forum in China, already has a registered membership of more than 30,000. Members gather online to share overseas shopping experiences, analyze customs policies and transnational freight prices, as well as compare favorite foreign discount websites.

Liu Yi works as an English translator at a magazine in Beijing. After falling pregnant, she began to explore the shopping possibilities available to her on overseas websites. Although Liu possesses a solid command of English, she was still wary about making her first online purchase. She ended up picking out some products for her baby, commenting, "These are the same things I buy in my local supermarket, but the prices online are really great – just a third of what I'd expect pay down the road." Liu only bought lightweight items online due to expensive international freight rates – US $15 for the first kilogram and US $5 for every additional one.

At present, there are still a number of hoops consumers in China must jump through before hitting overseas digital malls. After obtaining a dual-currency bankcard, shoppers must register an account on paypal.com for overseas online bank payments. Having done this, some websites still do not deliver goods directly to them in China – buyers need to set up an account with a forwarding company, which will receive their goods from the retailer and send them on to China.

Value-added taxes, import tariffs and consumption taxes all contribute to the high prices of foreign goods on Chinese supermarket shelves. In some cases the accumulated tax rate on imported common household goods can be over 50 percent. Given this high tax burden, it is no surprise that people are turning to the Internet, by which means many of these taxes can be avoided.

With women leading the way in China's online shopping revolution, cosmetics is currently the number one product in terms of volume that Chinese shoppers order from abroad.

The huge profits generated globally by online retailers is encouraging overseas Chinese to set up websites that capitalize on the growing domestic appetite for online bargains.

Feng Wei, a native of Chengdu in Si-chuan Province, now lives in the U.S. Three years ago he began work as an informal purchasing agent for his Chinese friends looking to buy Coach handbags. As more people sought his help, he decided to abandon his telephone and open an online store to display the bags and take orders. Nowadays, each month he sells around 40 bags, securing him a handy monthly income of about RMB 10,000.

"As shopping malls give big discounts more frequently than official websites, we usually buy bags from mall outlets during the discount season and make them available at the cheaper prices all year round," Feng says. "It's all about price. Our goods are cheaper, so people buy from us."

A resident of the Netherlands for the past five years, Fang Hong, originally from Beijing, purchases baby food and milk power for Chinese customers concerned about the domestic safety record of these products.

"According to local Dutch law, one can buy at most three cans of milk powder at any one time. But I get so many orders from the Chinese mainland that I have to go to supermarkets in nearby cities three times a week to buy enough to meet demand." Fang took up this middlewoman role after the Chinese milk scandal in 2008. Lingering domestic caution keeps her in business.