A new pilot programme is set to give foreign etailers access to China’s 163m web users for the first time.

The service, launched by Alipay, an online payment subsidiary of Chinese internet giant Alibaba Group, enables foreign currency transactions between Chinese consumers and overseas firms.

The company has initially partnered with only three retailers, all in Asia, but says it plans to expand the network to over 100 foreign etailers by the end of 2007.

Two state-owned banks will set daily exchange rates for shoppers’ transactions, as the Chinese yuan has not yet been fully floated.

According to the China Market Research Group, Chinese shoppers spend $6bn on luxury items every year, but high import duties mean the bulk of that spending takes place abroad.

Shaun Rein, managing director of the analyst group, told ZDNet Asia:

“Alipay will now let China’s emerging 250m-strong middle class buy whatever items they want that are available in the world.
They no longer have to travel abroad to buy items, which is very important for the middle class who cannot always afford to travel overseas. But they can now buy what they see on the internet and in magazines.”

Alipay said it hoped the service would generate around $100m in monthly transactions by the end of the year, and said it would extend the network to European and American retailers in the long term.

The company also plans to enable overseas customers to make online purchases from Chinese firms.

Jonathan Lu, president of Alipay, said:

“China’s consumers can now shop around the world without leaving their homes. To buy the latest products from Paris, London, New York and Hong Kong, all a China consumer needs is internet connection and an Alipay account. We’re inviting the world’s leading retailers to partner with us to help bring foreign products to China’s consumers.”