By Shaun Rein
This commentary is based on an article published on Forbes

In CMR’s latest thought leader position for Forbes, we show that e-commerce is actually booming in China, driven by changing demographic demands, especially from Chinese youth.  It is critical that companies begin to look at how to use the internet to drive sales.

1) Not only should companies utilize the internet for marketing purposes, but they should look at it as a critical sales channel to Chinese youth who are increasingly turning to the internet to buy not just cheap items like books and DVDs but more complex and expensive products like electronics, luxury items, and clothes.

2) Credit cards in circulation will grow 5-fold to 250 million by 2013.  The financial institutions that become the winners will be the ones that focus on customer service and develop strong loyalty programs.

3) While countrywide savings rates hover around 40%, Chinese youth in urban areas have effective savings rates of 0 as they consume and want to enjoy the good life now.  This optimistic and demanding mindset drives how Chinese youth consume.

4) Read the success story of French women’s retailer Trois Suisses (3S) that pushed hard on its internet sales to great success while Bertelsmann failed to see the shift in shopping habits and had to retreat its book business from the China market because it did not move online.

Shaun Rein is the founder and managing director of the China Market Research Group (CMR), a market intelligence firm that helps companies make smarter decisions in China.