China

In 2009, B2C and C2C transactions in China totalled $37 billion, according to a report by the Boston Consulting Group (BCG). BCG forecasts that they will surpass $100 billion in just three years.

Many of the new industry giants of China's online marketplace (Alibaba.com, Tencent, and Ctrip.com, among others) are homegrown players that have fended off tough competition from established multinationals.

Some 8% of the Chinese population shopped online in 2009, compared with just 3% in 2006. E-commerce adoption is estimated to jump to 19% of the population by 2012.

The report highlights the fundamental structural characteristics of the Chinese e-commerce market. Chief among them are the prevalence of C2C transactions, many of which take place at Taobao, an online auction site that is part of Alibaba Group. Consumers in China still prefer cash transactions, with only 20% using online payment systems. (Boston Consulting Group, May 2010)

Internet Advertising

Internet ad spending in China will reach $1.7 billion in 2009, according to MAGNA, ZenithOptimedia and Bernstein Research. In 2012, ad revenues are expected to generate $3.5 billion, a 24% compound annual growth rate from 2007.

Online advertising spending in China, 2007-2012:
- 2007: $961 million
- 2008: $1,441 million
- 2009: $1,733 million
- 2010: $2,190 million
- 2011: $2,799 million
- 2012: $3,457 million

China's online ad market pales in comparison to more developed countries, however. In the US, eMarketer estimates that $25.7 billion will be spent online in 2009, and $37 billion in 2012.

Digital ad spending in China is almost evenly split between search and traditional display and rich media ads, with other channels such as video, classifieds and e-mail making up a steady 6%. By 2012, however, search will overtake display and rich media.

The Bernstein projections closely resemble eMarketer's in the short term. eMarketer predicted that online spending reached $1.4 billion in 2008 and will hit $1.95 billion in 2009. But the similarities end after that, as the firm expects online ads in China to generate nearly $5 billion in revenues in 2012. (eMarketer, April 2009)