Click profit(2)

A recent PwC Global Total Retail Survey of 15,000 online respondents from 15 territories found that the Chinese respondents were more active in online shopping compared to their global counterparts.

About 62 percent of the Chinese respondents said they shop online every week, compared with just 21 percent of global respondents. In addition, these people more often use social media and also make purchases through mobile devices.

The Chinese government has seen e-commerce as the catalyst that will help it transition from an export-oriented society to one that is more driven by domestic purchases.

According to studies conducted by the Chinese Academy of Social Sciences, online shopping, which directly generates more than 10 million jobs, will drive about 5.48 percent of China's economic growth by 2020.

"It may seem like a small number, but it can have a strong influence on the economy. Not only will the size of the economy increase, but the economic structure can also benefit from the e-influence," says Li Yongjian, head of Information and e-Business Studies at the National Academy of Economic Strategy at the Beijing-based academy.

The conveniences associated with online shopping also help in narrowing the purchasing gap between urban and rural China. "People have access to the same products online, be it in first-tier cities or fourth-tier cities," Li says.

The online purchasing power of small cities or even counties in China is something that cannot be ignored for companies looking to carve a niche in China. Alipay, the e-payment arm of Alibaba, found that residents of Yiwu, Zhejiang (home to a major wholesale market for appliances, accessories and toys) spent an average of 40,000 yuan online in 2013, more than twice the amount for Beijing.

On Alipay's top 100 list of small cities and counties, 36 out of the 100 localities were in Zhejiang. Jiangsu province ranked second, with 27 small cities, followed by Fujian with 13.

Residents of the top 100 small cities and counties shopped online eight times on average last year. Those who spent more than 1 million yuan in 2013 mostly came from Yiwu and Cangnan county in Zhejiang, as well as Changshu, a city in Jiangsu province.

The ability to reach out to more customers in remote areas of China, where stores are few and the costs of building a physical presence are steep, makes e-commerce a popular choice for Western companies.

Many governments and official organizations in the West are aware of the importance of e-commerce in China. British Prime Minister David Cameron's closed-door meeting with Alibaba founder Jack Ma last year further reinforced the sector's importance in China for overseas companies, particularly those from the UK.

Alibaba's Tmall has already teamed up with several overseas government agencies on special promotions allowing Chinese consumers to buy fresh fruits and other food online, direct from the source.

In February, it successfully sold tulips online with the Netherlands Consulate-General. In early May, it paired with New Zealand Trade and Enterprise, the country's trade development agency, to ship more than 50,000 pre-ordered oysters and mussels to China within 72 hours of harvesting.

Some experts say that Chinese esteem foreign brands more than local ones. Carrie Yu of PwC Hong Kong says that as consumers in China become more sophisticated, they will increasingly value quality, brand and after-sales service, which extends to fairness in doing business. "This is the big advantage for foreign brands," she says.

However, Zarrella of KPMG China, says that though Chinese people like high-quality products, it does not necessarily mean that they are willing to pay a premium for that.

"They do not like cheap goods anymore, but they do like to bargain. And they tend to do most of their research online to see where is the best place to buy it," he says.

The hunger for high-quality products with reasonable prices has created a new business called Daigou, which means buying via overseas contacts through Taobao or other professional buyer agencies and websites. Daigou agents charge a commission and mail the purchased goods across borders.

The top items on Daigou lists are baby formula and luxury goods. A China luxury goods market study released by Bain & Co in December 2013 found nearly 60 percent of the 1,400 customers interviewed had made at least some luxury purchases through the Daigou market.

Statistics from the China E-commerce Research Center showed that the online Daigou market amounted to 74.4 billion yuan in 2013. The center forecast that the market would exceed 100 billion yuan in 2014. The booming Daigou business is also part of the reason why Alibaba chose to launch an independent website called Tmall Global in February to allow overseas brands and merchants to sell directly to Chinese online shoppers.