China’s consumers are by no means the wealthiest in the world. But they are years ahead of their counterparts in many developed economies in terms of how they shop and pay for what they buy. In this, they are revolutionising the way consumer finance is conducted in the world’s second-biggest economy.

Like so many of the changes sweeping China, the uptake of internet and digital technologies has happened with head-spinning speed.

As recently as 2000, a mere 1.7 per cent of mainland Chinese were online. Now, the country has more than 700m internet users – a penetration rate of more than 50 per cent.

Visit any Chinese city these days, and you will find pretty much everyone toting a smartphone or tablet – or both. China’s e-commerce sales have soared from practically zero in 2003 to nearly $600bn last year, and now top those in the United States. Alibaba’s annual “Singles Day” shopping event generated a massive $17.8bn-worth of sales on its online marketplaces earlier this month, up 32 per cent from a year earlier.

Put another way, mainland China’s consumers – like those in many other Asian nations – have gone from (nearly) no-tech to high-tech within just a few years, largely bypassing clunky fixed-line telephony to leap into a world where and online shopping smartphone ownership have become the norm.

This transformation is explained by a powerful combination of factors.

First, mainland China’s retail and telecommunications networks – again, like those in other developing economies – were for decades underdeveloped and inconvenient. So China’s consumers eagerly embraced the speed and choice that the internet and mobile phones brought to buying clothes, hotel stays or movie tickets, and swapping shopping tips with their friends.

By now, a generation of Chinese has grown up with a different concept of “convenience”: Residents of, say, Shenzhen or Guangzhou are perfectly likely to buy items via the smartphone in their pocket, rather than walk one block to the store that stocks them.

This is the world that anyone doing business in China needs to adapt to: an e-commerce environment that is one of the most developed in the world, and that is growing rapidly. Research company eMarketer estimates that China e-commerce sales will hit nearly $900bn this year – nearly half the global total – and more than $2.4tn by 2020. Already, 55.5 per cent of that is done via mobile devices; by 2020, that will have risen to 68 per cent, according to eMarketer.

Meanwhile, the mainland authorities want to continue to develop the Chinese economy, and have supported the build-out of internet-related technologies.

China’s internet and mobile revolution is perhaps most visible in the increasingly affluent and vibrant Pearl River Delta, which is home to high-tech corporate giants like Huawei Technologies and Tencent. Internet penetration in Guangdong province, where the Delta is located, is well above the national average. For example: there are 78m internet users in Guangdong, nearly three-quarters of the population.

All this has massive implications for the financial and e-commerce sectors in China, which have raced to adapt to Chinese consumers’ ravenous appetite for digital innovation.

Just as buying behaviour has changed from traditional over-the-counter to online/mobile, so too financial interaction is rapidly becoming paperless, wired and digital.

Alibaba, for instance, has capitalised on the popularity of its own online marketplaces by creating its own payment system, Alipay. In 2015, Alipay had 451m active users conducting on average 153m transactions per day. By comparison, PayPal’s 180m active users conducted just 16 million transactions a day.

And Tencent in 2014 set up an electronic wallet – which allows people-to-people payments via mobile phones – for users of its massively popular social messaging apps.

The uptake of such technologies has been immense.

Within just 72 hours of ApplePay’s launch in mainland China in February, 3m payment cards had been registered to the service. That’s three times the total registered in the US.

More than 410m Chinese now regularly use e-payment methods – nearly 90 per cent of them via mobile devices – according to official data.

Traditional banks also are responding to China’s e-commerce/e-payment ecosystem, and are rushing to introduce new digital tools for their customers.

Virtual teller machines, for example, allow customers to interact with bank staff by video, scan documents and provide e-signatures, meaning that things like opening an account becomes simpler and quicker.

Mobile apps are increasingly common and making it easier for customers to check their accounts or make transactions, wherever they happen to be.

Thumbprint ID and voice-recognition technologies are already available and will before long be commonplace, adding an extra layer of security and convenience for online and mobile customers.

“Bricks and mortar” bank branches and people-to-people interaction is still highly valued, although their role is rapidly changing to focus on meeting customers’ wealth management and more complex needs. Paperless, branch-less “clicks and apps” banking allows banks to service most of their customers’ transactional needsmore efficiently and quickly, around the clock – whether they are in Shenzhen, Shanghai, rural Sichuan, or on holiday in Thailand.

Few people could have imagined the changes sweeping China’s retail and banking scene just five years ago. The next five years are sure to bring still more change. Banks and retailers will need to be nimble, and anticipate the future needs and preferences of China’s 1.37bn shoppers. Those who get it right will find the size of the prize is immense.