Market Overview


The Chinese Online Retail eCommerce Sales reached 138 billion USD  in 2011 | Over 505 million Chinese have internet access | China aiming for 2.8 trillion USD dollar by 2015.


Chinese eCommerce Market 

The Chinese online retail sales exceeded $138 billion in 2011, and accounted for 3.8% of the total retail sales volume in China. As of November 2011, there were 505 million Internet users in the country, exceeding the entire population of countries such as the United States, according to a China Internet Network Information Center report in January 2012. Chinese ranks 3rd on the GDP world ranking with over 11 trillion USD dollar, following the European Union (15.8) and the United States (15).

A report by the Boston Consulting Group (november 2011) found that China is likely to be the world's most valuable e-commerce economy over the next four years, due to strong consumer demand and Internet access outpacing physical retail outlets. The Chinese ministry acknowledge the importance of eCommerce for the Chinese economy and for her competitiveness internationally. They released a 10-point plan outlining where it aims to take action, including cracking down on illegal e-commerce, improving consumer rights, enhancing e-commerce laws, regulations and standards, as well as developing improved statistical monitoring of the market.

Main drivers for the fast growing Chinese online retail sales are the rapid economic development (8-10% growth year over year) and improved life standard. Already over 40% of the Chinese people have internet access meaning over 500 million people capable of spending online.


Preferred Payment Methods China

The most popular online payment methods are Alipay, Tenpay, Online Bank Transfers, Cash-On-Delivery (COD), Credit Cards and Debit Cards (China UnionPay).



Alipay is China’s leading online payment solution, providing an easy, safe and secure way for millions of individuals and businesses to make and receive payments on the Internet. As of December 2010, Alipay had more than 550 million registered users and facilitated around 8.5 million transactions daily. Alipay provides an escrow payment service that reduces transaction risk for online consumers. Shoppers have the ability to verify whether they are happy with goods they have purchased before releasing funds to the seller. Alipay provides payment solutions in China for more than 500,000 external merchants for online retail, virtual gaming, digital communications, commercial services, air ticketing and utilities fee payment transactions.

Alipay partners with more than 65 financial institutions, including 19 leading national and 45 regional banks across China, as well as Visa and MasterCard. In addition, Alipay also facilitates offline value-added services through a strategic partnership with China Post, which has coverage of rural areas and university campuses.



Tenpay is the main competitor of Alipay. More than 200,000 shopping website accept Tenpay. Tenpay is compatible with the e-banking service of major domestic bank. Users can use Tenpay to send payment, receive payment and withdraw money to bank account.


Cash on Delivery (COD)

Cash on delivery (COD) in China is a popular online payment method that allows the purchaser to pay at the time of delivery (generally to the shipping company), rather than paying at the time of purchase. There is a preference in China towards this payment method because goods can be quality assured by the receiver prior to payment. COD payments may be made by cash, certified check or money order.


Credit Cards (China UnionPay cards)

Credit cards are one of the most popular forms of payment for goods and services across the world, but this is not the case in China, where online credit card usage is approximately 5%. International cards such as Visa and MasterCard are not common China online payment methods due to the low-trust associated with them in China, and are instead being mainly used by foreign nationals only.


Debit Cards (China UnionPay cards)

Debit cards are widely used by Chinese consumers for telephone and Internet purchases. The funds paid using a debit card are transferred immediately from the bearers account through use of a “push payment “principle. During the online payment process, users are directed to their personal bank account where they physically log in and authorize the transaction.


China Payment Method Trend

Although COD makes up the largest percentage of China online payment method preferences in China (approximately 40%), the trend towards using debit/credit cards (China UnionPay cards) is continually increasing as more domestic and international online merchants integrate the option of online card payments on their website.Many large international eCommerce merchants in China are choosing to offer liberal return policies for card payments, rather than provide a COD option, making UnionPay card payments a great China online payment method for any international merchant.

(Sourced from China Payment Services)


Payment Gateways China

Payment gateways or Payment Service Providers are the 'hub' for eCommerce merchants to various payment methods. By linking online shoppers and stores through online payment solutions, these gateways play a critical role. They mainly make money in two ways: from payment commission from online stores (often 1-3% based on transaction value) and secondly from interest on idle cash from online shoppers’ accounts.

The Chinese payment gateway field is much consolidated with the top five companies having about 90%+ market share. Alipay, Tenpay and Chinapay, with 50%, 21% and 8% market share respectively, are the top three.

Founded in 2004, Alipay belongs to China’s biggest ecommerce conglomerate Alibaba, which brings massive website traffic to Alipay. Users of Alibaba’s C2C arm ( and B2B arm ( are required to use Alipay as the default payment solution. Tenpay is owned by Tencent, which owns the most popular instant messenger software QQ in China. Users not only can make transactions through Tenpay, but also can use it to charge their mobile phone, online game account or buy air tickets. Chinapay was launched by China UnionPay, China’s government-backed inter-bank transfer network and credit card standard issuer. Because almost everyone in China has a China UnionPay bank card, Chinapay has this huge advantage in the gateway market.

Other Chinese Payment Gateways include 99bill, Chinabank, Lakala, YeePay, Baifubao, SinaPay, China UnionPay and CnCard.


Industry Bodies and Useful Links



Market Research & Publications (


Asia-Pacific Online Payment Methods 2012

China B2C E-commerce Report 2011

Asia-Pacific Online Gaming Report 2012



UPDATED: 18 November 2012


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