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No Credit Card? No Problem.  By
Frank ReedSince I learned earlier this month about the Chinese and their dedication to workarounds regarding blogging, I have looked for other things that this ancient culture is doing to move itself into a modern economic powerhouse. I used to think that it would be best for my kids to learn Spanish as a second language here in the US but based on what might be coming down the pike from Asia, they may need to know Mandarin to compete in the future global economy. At Silicon Hutong the author of a post on July 3 (I can't find his / her name anywhere... hmmmmm... I wonder why?) examines an interesting phenomenon that we in the US probably can't even fathom. It's the growth of e-commerce without the widespread use of credit cards. I started scratching my head wondering how in the world this could even be possible but then I thought about the fact that I am just spoiled here (and because of the "magic" of credit cards carrying more debt than I should!). As I learn more about the Chinese culture moving toward a 21st century online life it is fascinating to see the ingenuity and shear "can do" attitude that this culture exhibits. Rather than bemoan the fact that they are hindered by the lack of credit card use in the country (only 1 in 20 adults even has one or just one in every 3.5 internet users) but the author points out that some observations of this apparent obstacle miss the mark: No credit card, goes the thinking, no electronic retail. The ubiquitous Shaun Rein, CEO of Shanghai-based China Market Research Group, echoes this sentiment in an otherwise excellent editorial in Forbes magazine:
"Our findings suggest it is a lack of credit cards and other payment options, rather than a cultural aversion to buying online that has curtailed the growth of e-commerce in China." About half-right, I would say. The cultural aversion issue is a canard, and we will take that up in another post.
Personally I am looking forward to the other post but back to the story. To cut to the chase the Chinese have utilized one of the methods that we, I, America would find antiquated and probably say "Aww, isn't that cute?".......it's good old fashioned C.O.D. (cash on delivery). I can't remember the last time I did anything COD other than buying at the point of purchase. But what I do or what the rest of the world does is not the matter here. What does matter is that this huge market is finding ways to buy online despite not having credit cards. Maybe it's the Law of Large Numbers in effect but the growth potential in China simply is staggering compared to anywhere else on the globe. In addition to the potential there is the desire. That is pretty cool. Of course, there are inconveniences but they look worse when taken in from a Western point of view. This culture has been without so much that we call "normal" for so long that they are figuring out how to get things done. Banks are suspect of fraud online with credit cards so their reluctance to issue the cards is heightened. There are plenty of obstacles that, if removed, could open the floodgates but that may not happen. Until then I intend to keep a pretty close eye on the innovation and desire of the Chinese to compete with and benefit from the world economy that exists online. As a marketer are you thinking "outside the box" to service the supposedly unserviceable right here in your own backyard? While we may not be looking to do business in China we should take lesson from them as to getting creative and maybe tapping some under served revenue streams. In this day and age of economic downturns and gloomy forecasts it looks like the truly savvy will come out on the other side as a winner. Comments
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