How will China's online boom impact e-commerce?

The race for speed of delivery
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Story highlights

  • China is the fastest growing e-commerce geography in the world
  • Mobile device use for the first time overtook personal computer use in China
  • China's internet usage grew 2.3% in the first half of 2014 to 632 million users
  • E-commerce in China is dominated by Alibaba but is closely followed by JD.com

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(CNN)If there's anything serving notice on the traditional bricks and mortar department store, then it's China's internet and e-commerce statistics.

This year the number of internet users going online with a mobile device, such as a smartphone or a tablet, overtook those doing so on a personal computer for the first time.
    And not surprisingly, e-commerce is booming.
    "One in two online citizens in China are now buying online. And that penetration is going up," said Shen Haoyu, CEO of JD.com China's version of Amazon.com and e-commerce giant Alibaba.com's biggest competitor.
    Only a few short decades ago, China had practically no consumer culture, but today millions of consumers daily buy computers, clothing and even fresh seafood online.
    "In the future, e-commerce, the main battlefield will be on the mobile devices. By next year the overall smartphone users will exceed that of PC users. So you can see that mobile commerce is definitely the number one trend," said Yu Gang, CEO of Yihaodian, a Chinese online grocery business.
    While internet penetration can be problematic for developed markets where people are used to high street shopping, in China e-commerce entrepreneurs have little to worry about.
    With China's total number of internet users up 2.3 percent to 632 million in 2014, according to figures from the China Internet Network Information Center (CNNIC), the country has the largest number of online users in the world.
    The data showed that 527 million people of this total went online via a mobile phone and that the number of online shoppers in the first half of 2014 surged by 42%.
    China is currently the largest smartphone market in the world, having overtaken the US in 2012. By 2018, it will account for more than 33% of the estimated 1.8 billion smartphones likely to be shipped that year, according figures from IDC.
    E-commerce in China is dominated by Alibaba but is closely followed by JD.com which is more than 17% owned by its arch-rival Tencent Holdings.
    The big movers in mobile services in China at the start of 2014 were music, video, gaming, and group-buying, all of which shot up by double-digit increments.
    The fastest growing services were travel booking, up 65.4%. Mobile payment, which increased 63.4%, and online banking, which showed a rise of 56.4% rise.