B2C retail sector increase rate slows

The turnover of China's online business-to-customer retail sector totalled 81.87 billion yuan ($13 billion) in the first quarter of this year, while the increase rate hit a record low, an industry report shows.

The sector's quarterly increase rate dropped to 7.6 percent during the first three months of this year compared with a 22.4 percent increase in the fourth quarter of last year, said an Analysys International report released on Thursday.

The increase rate slowed down because retailers' costs rose. Massive promotion tactics during the holiday season before the end of 2011 was also blamed for eating into demand in the last quarter'. The increase rate jumped by 22.4 percent quarter-on-quarter in the fourth quarter of 2011, the fastest last year.

"The essence of competition in the e-business sector is who gets the biggest market share. The winner takes all,"said Lei Jun, the nation's Internet guru and chief executive officer of Xiaomi Corp.

Large online retailers, such as Suning Appliance Co Ltd and Tmall.com, have launched a new wave of sales campaigns this year in a bid to grab a bigger market share.

Analysys International did not disclose its estimations for the second quarter but indicated that the increase rate of the past quarter is likely to be the slowest throughout the year.