Nearly one-third of online shoppers in the mainland were cheated an average of about 500 yuan in the past year, a Xinhua report said yesterday.
Internet fraud cost more than 60 million mainland internet users 30 billion yuan (HK$36.7 billion) in the past year, and may become a major impediment for further expansion of online retail businesses, Xinhua said.
Citing China Electronic Commerce Association figures, the report said that of the 194 million people who shopped online in the past year, nearly 62 million had been cheated. The losses were estimated to exceed 30.8 billion yuan.
Most fraudulent websites cheated customers through selling fake products or making false advertisements. They paid search engines to have a higher rank on search results, or used similar web addresses to real brands to fool consumers.
Professor Chai Yueting, at Tsinghua University in Beijing, said the nation's website verification services were still in their infancy despite the boom in online shopping, exposing those customers to a high level of risk.
"The industry is highly competitive with numerous participants providing all kinds of services, but there are still no national standards at this stage," he told Xinhua.
Internet fraud has been on the rise since 2010, said Xiao Nan, a police officer in Jilin province who has investigated online scams for the past six years.
"Fraudulent websites usually are not legally registered. Most operate on servers outside the country. And the swindlers used only QQ instant messengers or virtual voice phone services, making them almost impossible to locate," Xiao told Xinhua.
Without proper receipts, victims of online retail fraud find it difficult to lodge formal complaints with consumer associations or the police.
Liu Qi, from Jilin, said he wanted a style of sneakers that he could not find in local shopping malls.
He came across an online shop www.china-newbalance.com  that claimed to be the official Chinese website of the internationally renowned brand. The website also promised that all their products were authentic and would compensate customers 10 times the original price if the shoes were found to be fake.
The online shop also offered generous discounts and free delivery. Liu paid 549 yuan for a pair of shoes originally priced at 659 yuan.
But when he received the shoes, he found "they were so badly made that anyone could tell they were fakes". But he was unable to contact the seller again to request a refund.
About 70 per cent of defrauded consumers lost between 500 yuan and 2,000 yuan, according to the report. Some were reluctant to report their cases to police because the sum of money involved was insignificant.
Statistics show the mainland's internet users topped 513 million by the end of 2011. Total online shopping is forecast to reach 1.2 trillion yuan this year from 773 billion yuan last year, according to iResearch.