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Fake goods, pricey malls push Chinese to shop online
Global Times | December 04, 2011 15:30
By Guo Yukuan
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Illustration: Liu Rui
Illustration: Liu Rui

In recent years, small and medium China-sized enterprises (SMEs) in China have been under growing pressure. Many business people feel they can barely keep their firms going. 

This is partly linked to the regressive tax system in China. The government levies high taxes on SMEs, whereas large enterprises enjoy preferential policies as local governments strive to attract investment. 

The rapid growth of online business is also an important reason. The swift expansion of large Internet enterprises is squeezing some SMEs out of the market.

The boom of China's e-commerce has been reflected in the mushrooming growth of online shopping sites., and VANCL have all seen their market value climb. There have also been new models of online shopping, from B2C, C2C to group buying. Consumers' enthusiasm for buying online keeps growing. Buying a roll of napkins or a packet of biscuits online is not unusual.

But in Hong Kong and Taiwan, there are still many traditional shops, and online shopping sites are not as popular as in the Chinese mainland. In the US, although e-commerce companies such as eBay and Amazon are doing well, main street shops have not been so badly affected and e-business is not booming to the same extent as in China.Why the difference?

One reason is the relatively low labor costs on the Chinese mainland. A large amount of low-end labor makes large-scale logistics possible. We can see couriers zipping around everywhere. Besides, we have a new shut-in generation, who prefer to stay at home and shop online.

Many people attribute this to cultural reasons, but this isn't convincing to me. I think it's because of poor urban design in Chinese mainland cities. In Hong Kong, Taiwan and many cities in Europe and the US, the streets are narrow and many roads are designed for pedestrians. Small parks provide pleasant rest spaces.

The small shops along the streets are distinctive and many have a long history. Even in New York, the most prosperous metropolis in the world, small shops are dotted across the city, and many century-old shops are very popular. In these places, shopping is not only a way to buy goods, but also a pleasant social experience.

However, the wide highways of Beijing's ring roads, for instance, are only designed for the rich and powerful to drive their luxury cars. Even worse, the polarization of shopping places in Beijing is very serious, with either super-expensive brand stores like Shin Kong Place or the low-end wholesale market such as Xinfadi Market.

The rich and powerful can drive to go shopping in Shin Kong Place . But ordinary people and recent college graduates can't find a comfortable place to shop. It's also chilling to just think about travelling through crowded mass transportation, to even more crowded shopping markets.

Those wholesale markets are chaotic, and the goods often fake or poor-quality. Ordinary people have no choice but to shop online.

The boom in Chinese online commerce is good. But it's developed to an abnormal degree. We shouldn't be proud of the power of our e-businesses. Their rapid development just shows that their business model suits our current unnatural circumstances, not that they are truly competitive on the world stage.

The author is a journalist based in Beijing.

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