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THE MARKETS
Chinese consumers spent more than 784.93 billion yuan ($124.6 billion) on online purchases in 2011, skyrocketing 66 percent from a year ago, said a report jointly released by the International Data Corp., a global market research firm and Alibaba, China's leading e-commerce giant.
The consumption boom was supported by a vibrant economy and solid wage growth in the country. The buoyancy delivered a strong boost to China's e-commerce firms. Alibaba's Taobao, China's largest C2C platform, recorded an average daily transaction volume of at least 4 billion yuan ($634.9 million) last year.
The online consumption volume currency accounts for around 3 percent of China's retail sales of consumer goods, well below the level of developed countries. That indicates great potential for the market to grow, said the report, predicting that the proportion will increase to 7 percent by 2015.
China's second largest online video site Tudou reported a net loss of 148.9 million yuan ($23.6 million) in the fourth quarter of 2011, compared with a painful loss of 263.7 million yuan ($41.9 million) a year ago.
The loss was in large part attributed to growing costs on video programs and broadband Internet services. Tudou said its operation costs in the fourth quarter more than doubled from the previous year to 160 million yuan ($25.4 million).
"Despite growing user traffic, a major cause for concern is Tudou's weakness in advertising revenues," said Zhang Fan, an analyst with the Beijing-based consulting firm Analysys International. "Tudou lacks a stable source of high-end ad clients."
"Thanks to a close tie-up with Weibo, a popular micro-blogging site, Tudou is enjoying torrid growth in users," added Zhang. "But the expanding customer base has yet to translate into profits."
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