Growing shift to online to support China’s e-commerce market: report
The country is expected to continue dominating the global e-commerce sector.
China’s e-commerce market, the world’s largest, is expected to register a strong growth of 10.4% in 2022, as consumers are increasingly shifting from offline to online, according to a report from GlobalData.
GlobalData expects the Chinese market to continue dominating the global e-commerce sector and grow by 10.4% in 2022 to reach $2.3t (CNY14.5t).
E-commerce sales in China grew at a compound annual growth rate of 13.3% between 2018 and 2021 to $2.1t (CNY13.1t) in 2021. The country accounted for over 37% share in the global e-commerce market, in terms of payments value in 2021.
GlobalData’s banking and payments lead analyst Ravi Sharma said the market has been supported by rising internet and smartphone penetration, increasing consumer confidence in online shopping, the emergence of e-commerce platforms, and the availability of popular alternative payment solutions such as Alipay and WeChat Pay.
“The COVID-19 pandemic has further accelerated the e-commerce activities in China, as wary consumers are increasingly using online channels for purchases to avoid getting exposed to disease vectors, a trend that continues beyond pandemic,” Sharma said.
The growth in the e-commerce market is also supported by the improving e-commerce activities in rural areas, GlobalData said. According to China’s Ministry of Commerce, online retail sales in rural village communities rose 35.3% YoY in Q1 2021.
Online shopping events such as Singles’ Day (or Double 11) are also attributed to contributing considerably to overall online sales.
Chinese e-commerce giants including Alibaba and JD.com collectively registered a massive sale of $139 billion during the Singles’ Day event in 2021, registering a jump of 8% and 28%, respectively, over the previous year.
GlobalData expects the e-commerce market to grow at a CAGR of 8.7% between 2022 and 2026 to $3.2t (CNY20.2t) in 2026.
“The Chinese e-commerce market will continue to grow supported by the rise in consumer preference for online shopping, improved payment infrastructure, and proliferation of payment tools,” Sharma said.