The Rise Of China’s E-Commerce

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

“Multinationals such as Unilever, L’Oréal and Adidas make more revenue in Asia than in America and their bosses turn to there, not to California or Paris, to see the latest in digital marketing, branding and logistics.”
The Economist
January 2021

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, Pinduoduo, 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.

“I hope 15 years later people forget about eCommerce – because they think its like electricity.”
Jack Ma
January 2015 at the World Economic Forum in Davos
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