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Many analysts argue that Chinese consumers are conservative spenders and not willing to buy on credit or engage in e-commerce. The numbers initially seem to support such arguments as China's household savings rate sits at 40% vs. less than 1% in the U.S. But figures published by the Bank of China suggest that there are increasingly more cards being distributed and even more than one credit card per person in Beijing alone. Now I guess that will surprise a number of folks not so familiar with the growing acceptance of credit cards within the growing middle class in China.
The Bank of China said that banks had issued 162.6 million credit cards in China as of the end of June 2009. Not that large when considering the population in China but this is up 32.9% from a year earlier. Credit cards are becoming more accepted, mostly in the more popular in affluent cities such as Shanghai and Beijing. But generally the use of the cards remains small nationwide. China’s average credit card penetration is 0.12 card per capita. But in Beijing the figure has risen to 1.35 cards per person, and in Shanghai the figure is 0.75.
The Bank of China data conflicts with the old stereotypes of Chinese consumers stuffing yuan under their mattresses. This myth can no longer be attributed to the increasingly well-off middle-class Chinese segment and will bode well for local B2C and multinational companies that hope to tap into China's fever for Web 2.0 and e-commerce.
For me, the challenge for e-commerce is not the payment systems (Alipay and credit cards) but the online trust factor that needs to be gained before we start seeing the potential of the Chinese consumer doing transactions online. That said, this is one of the fastest growing sectors within digital marketing and an area I am personally optimistic in.
