Business

BEIJING: Wal-Mart Stores (WMT) announced it had finally received Chinese government approval for a proposal to buy a majority stake in Yihaodian, a Shanghai company leader in the country’s booming online retail industry.

China’s retailers, already struggling because of an economic slowdown, got another jolt of bad news on Tuesday over Wal Mart's decison who t first submitted the deal to the government in December and has been waiting for the Ministry of Commerce to give it the O.K. ever since; a deal that suddenly puts Wal-Mart at the center of one of China’s fastest-growing sectors.

China’s economy is slowing because of fallout from the European debt crisis, but that’s not deterring Chinese consumers from making more purchases via the Internet.

According to reliable sources 210 million Chinese are shopping online, whose value of shopping transactions i jumped 51.6 percent year on year, to 268.4 billion yuan, in the second quarter of 2012, Xinhua reported, citing iResearch, a market research firm with offices in China and Silicon Valley.

It wasn’t that long ago that China was a laggard in e-commerce, and fewer Chinese consumers had credit cards, while delivery companies couldn’t provide reliable service.

In 2008, e-commerce amounted to only 2 percent of total retail sales in China, according to Shanghai’s RedTech Advisors.

But the growth of PayPal-like payment services such as Alibaba Group’s AliPay has made e-commerce easier. And with companies improving the speed of package deliveries, Chinese e-commerce is gaining ground.

Reports indicate that this year, online’s share of total sales will be between 6 percent and 7 percent,putting China at the same level as the U.S, while surpassing U.S. in the next two years.

It has been reported that with many retailers having slashed their delivery charges, there’s little reason for Chinese consumers to go to old-fashioned stores, as currently one uses these crowded malls, and despite services being not dso good , and being stressful even for the most enthusiastic shopper,yet It’s a much more pleasant experience.

The fight for customers is heating up. In trading on Wednesday, the Hong Kong-listed shares of China’s second-largest electronics retailer, Gome Electrical Appliance, fell as much as 11.1 percent after Liu Qiangdong, chairman of rival online retailer 360Buy Jingdong Mall, declared a “three-year price war” on his microblog. Liu said 360Buy would tolerate low prices even if they resulted in “zero margins.”

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