Chinova Information Technology, an e-commerce and payment joint venture company working closely with state-owned ChinaPay, is appointed partner for the development and operation of UnionPay's online shopping mall for high quality domestic and overseas products and services.
Chinova was formed earlier this year by the Chinese e-commerce and technology company LeiXun and the Swedish Payment Service Provider Paynova to take a leading role in B2C and cross-border e-commerce markets to and from China.
The co-operation is an exclusive partner agreement between Chinova and ChinaPay for development, operation and joint marketing of the China UnionPay eMall domestically and overseas. The new eMall will offer to merchants a prime channel for selling their products and services, and to online shoppers a place with attractive, high-quality goods and customer support. The target is to acquire a substantial share of the Chinese retail e-commerce market which, according to iResearch China, was 128 billion in 2008 and estimated to be around 800 billion RMB in 2012. In addition to retail comes cross border purchases and tickets for airlines and travel, digital media etc that in European markets often amounts to slightly more than all online Retail sales.
In Dec 4, the Chinese government body MOFCOM released a statement for its upcoming policy support to grow that ratio from today's ~1% to 5% in 2014, which is higher than in the USA in 2009 of 3.5%. This means the Chinese government will actively support a market growth to become over 1.000 billion RMB e-commerce retail in 2014, not included cross border purchases and tickets for airlines and travel, digital media etc.
Mr. Li Xiao-feng General Manager of ChinaPay, says, "ChinaPay will gain leadership in the Chinese e-commerce and payment market. We are very pleased to work with Chinova as our partner to accomplish this and in internationalising our e-commerce and cross-border payment services. We are now working with local branches nationwide, inviting leading merchants from our client base to participate in this opportunity to take B2C to the next level in China.".
"China UnionPay is a national brand with a promising chance to be highly successful in this industry. I am excited to be able to take an active part in their new online strategy. There is a strong demand for overseas products in China now, and we can effectively leverage CUP and Paynova's leading position and overseas presence,", says Pao Wan, CTO of Chinova, an Internet veteran, who co-founded Myrice.com, which was acquired by Lycos.com in 2001.
"For overseas gateways and platforms in e-commerce, travel, ticketing and payment services, as well as high-quality brand merchants, this is a good inroad to the Chinese market and an opportunity to connect and expand sales.", says Karl Alberts, CEO of Chinova. China's internet user penetration is only around 20% with over 300 million netizens, but still larger than the US market in total numbers where penetration is over 70%. Figures from iResearch show that more than 80 million Chinese consumers spent 65.8 billion Yuan on products purchased through internet stores during the third quarter of 2009 (excluding airline and other tickets). That was up 90 percent on the same period last year. Convenience, cheaper prices and increased variety were the primary reasons for the boom in online shopping. "White-collar" workers in Shanghai, Guangzhou and Beijing lead charge into online stores and spend over three hours per week shopping online. Clothes, books and cosmetics are the most popular purchases among women, while men prefer digital items such as cameras and mobile phones. Chinese consumers increasingly seem to be avoiding the "high street" and seek out cheaper and better products online; thus e-business has grown to become an important platform to help spur domestic demand. The Ecommerce market is around 1% of Retail sales today.