The Majority of Chinese Retail Sales in 2021 is Online
In 2021, China eCommerce accounts for more than 52% of the national retail sales, up from 44.8% in 2020.
As eCommerce consumption has been heating up in China, so has the competition. Brands understanding how to thrive in this digital ecosystem will be the ones winning in the China market.
China Retail E-Commerce Statistics
Above 52% of Chinese retail sales in 2021 will be eCommerce
In 2020, eCommerce sales grew by 27.5% to $2.3 trillion. For 2021 further strong sales growth above 20% is expected. This will make China the first economy in the world to have more online than stationary retail sales. Future Chinese eCommerce has a predicted CAGR of 11.7%, to reach $3.6 trillions in 2024, in which case it would equal 58.1% of total retail sales.
Future growth coming from rural shoppers starting to buy online
In 2020, 64.3% of the Chinese total population had been already digital buyers. This growth had mainly come from urban shoppers. Until 2024, 300 million rural Chinese will become first time digital buyers, which will raise the number of total digital buyers above 1.2 billion.
Source: eMarketer, December 2020
Online Shopper Demographics
Millennials represent the majority of digital buyers
Millennials, aged 25-44, represent 52% of all digital buyers in China. Moreover, since the pandemic, 70% of millennials interviewed by McKinsey have shifted from “buying online only for themselves” to “buying necessities for the whole family” , as they are supporting their elderly and less tech-savvy family members.
China's Gen Z are most likely to buy products spontaneously
Within China, the Gen Z consumers, aged below 25, are have the strongest habit of purchasing products spontaneously while on the go. However, even China’s Gen Y and Gen X consumers are generally more likely to purchase products online spontaneously compared to the youngest Gen Z consumer generations of other Asian economies.
Sources: eMarketer, December 2020 | McKinsey China Consumer Report, December 2020
International Comparison
Alibaba is the Biggest Platform
Taobao and TMALL both belonging to the Alibaba Group have a combined global market share of 29%, while only operating in China.
Half of the Platforms are Chinese
Six of the twelve leading global B2C platforms are from China, with a total market share of 45%. Biggest competitors to Alibaba are JD.com, Pinduoduo, Vip.com and Suning.
US companies still globally influential
Amazon and Ebay still dominate the eCommerce space in Europe, while Chinese companies are fighting for the domestic market.
New Platforms in Rising Markets
New eCommerce companies in South America (Mercado Libre), India (Jio) and South East Asia (Grab and Sea) are already adopting Chinese type of eCommerce approaches.
Source: Digital Information World, October 2020 | eMarketer, December 2020
What made Chinese eCommerce Boom possible?
Emergence of Alibaba
The national eCommerce champion gave Chinese an easy to use, affordable and reliable access to almost all consumer goods imaginable.
Delivery Workforce
China’s millions of migrant laborers enabled same-day deliveries for small delivery fees. Making eCommerce attractive for first time buyers.
Digital Payments
Not only Alibaba’s Alipay, but also the Tencent’s WeChat Pay made mobile payments easy-to-use, fast and available for everyone.
Smartphone Adaption
China’s consumers skipped PCs and went straight to smart phones. Today, 80% of Chinese eCommerce is mobile, around the clock and on the go.
