The world’s largest ecommerce market expanded by 20% last year, but the ways in which its digital buyers and sellers are connecting is just as noteworthy as the spending totals. It seems every internet company in China is now an ecommerce player.
So, how did ecommerce in China weather the pandemic and where are the numbers heading?
Ecommerce in China held steady in 2020 but did not boom as much as initially thought. Growth last year was 20%, 7.5% less than what was anticipated, for a total of $2.164 trillion. This year, the forecasted growth is 18.5%, lower than China’s recent figures but still the eighth fastest rate in the world. China will continue to account for more than half of all ecommerce globally (52.1%).
What is the outlook for China’s largest ecommerce players?
Alibaba remains the biggest ecommerce player in the world by sales but had a disappointing 2020 and saw its share of China’s ecommerce market drop below 50% for the first time. Pinduoduo (PDD) and JD.com are growing much faster. The forecast is that PDD will claim a 13.2% share and JD.com a 16.9% share. These “Big Three” will account for 77.2% of the market this year.
How big is livestreaming ecommerce in China?
If China’s ecommerce livestreamers were their own country, they would be the 3rd largest retail ecommerce market in the world this year ($299.66 billion in sales). Live Streaming ecommerce grew by 160% last year and will grow by another 85% this year.
What’s next for social commerce in China?
China’s social commerce figures are already 10 times what they are in the US at $351.65 billion. But the new story is livestreaming social commerce, which will grow by 95.5% this year and account for more than 50% of social commerce by next year.
China will remain the 2nd retail market for many years.
Before the COVID-19 disruption, China was on the fast track to displacing the US as the world’s largest market for total retail sales. However, the pandemic has pushed this crossover point further into the future, thanks largely to differences in how the two countries’ governments responded to the pandemic. Essentially, the US generated a rebound in retail spending thanks to its policy of putting money directly into the pockets of consumers, while China largely directed governmental support to businesses rather than individuals.
China’s annual retail sales growth rate is expected to remain above 5% for the next several years, which is still a standout figure by global standards. However this is a modest rate of expansion compared with the decades-long streak of double-digit growth China demonstrated during its boom times. Those heady days ended back in 2017.