Venture Capitalists Pour Money Into Chinese E-Commerce

Chinese shoppers are turning away from catalogs and are buying more online, providing a strong growth platform for e-commerce sites in the country backed by venture capital. In the first six months of 2010, six such e-commerce companies raised over $180 million. The sites attracting venture capital include retailers and wholesalers. One of the largest deals involved Beijing-based VANCL Co., a clothing retailer, which received $50 million of financing from a number of backers. The e-commerce trend is supported by the growth in credit card ownership and usage. Online transactions increased more than 100 percent between 2008 and 2009; most were customer-to-customer transactions. The country’s top retailers are just starting to take advantage of the trend: only 3 percent of the top 1000 retailers have launched online.