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Retail in China has come a very long way in the last two decades, from a time when the state-owned Beijing No. 1 Department Store was the absolute pinnacle shopping experience in the country, to a day when every major brand and luxury marque in the world seems to have opened storefronts in Shanghai, Beijing, and often elsewhere.

But few who have been overseas would suggest that the process of discovering, finding, getting to, buying, and using stuff you want or need is a particular pleasure in China. Not yet, anyway. 

Electronic commerce landed on China’s shores over a decade ago, and while a handful of companies engaged in online retailing (like Joyo, Dangdang and others) have done reasonably well, e-tailing in China has not grown with the kind of vigor that it has in the United States, Europe, and Japan, or even with the sort of explosive growth of China-focused wholesale and trade e-commerce sites like Alibaba and Global Sources

A series of public legends have grown up to explain this phenomenon, but in practice most of the logistical barriers have not proven quite as severe as many analysts suggest. In short, they’re hogwash. 

And the biggest problem - trust - has been all but ignored, or twisted into a systemic reason why e-commerce "won't work" in China.

For most areas in the online world, all you have to do is mention the name of a successful online company and the word “China” in the same sentence, and the world’s electronic herd of investors will fight each other to give you cash to make it come true. Think Baidu (BIDU) (“Google (GOOG) + China = $$$”), think Sina (SINA) and Sohu (SOHU) (“Yahoo! (YHOO) + China = $$$”)) etc. 

That has never been the case with electronic retailing (“Amazon (AMZN) + China = ????”) A decade on, electronic retail remains depressingly undeveloped.

But If you take a careful look around China now, you will discover that even though the buzz and hot air has long since leaked out of the China online retailing balloon, things are happening around here that suggest that China’s e-tailing boom is yet to come, and it will not be that long in coming. Not least of those factors is the stubbornly mediocre bricks-and-mortar retail experience on offer even in the toniest of stores.

Over the next few weeks, the Party Secretary and I are going to take a look at what we see in the market that is driving e-commerce forward. We will not simply be working from an academic or consumers perspective: we’ve actually built and run two non-traditional retailing ventures in China, and we have a reasonably good idea of what is possible.

Source: China's Coming 'E-tail' Renaissance