The retail e-commerce market in China brought in a whopping US$2.64 trillion in sales, according to figures by Statista. The number is forecasted to grow to US$4 trillion by 2026. It’s evident then that China is not only the largest e-commerce market globally but it’s also driving the future of e-commerce.
When we consider giants like Alibaba and Taobao dominating the industry, it’s easy to see why.
Top drivers of e-commerce in China
1. Increase internet penetration with digitalisation
In the last few years, China has seen a massive increase in internet usage and digitalisation. The China Internet Network Information Centre (CNNIC) revealed there are over 1 billion internet users in the country, as of December 2021. It is about 350 million ahead of India’s count, a figure that is already more than the population of the United States. With greater access to the internet, it’s no surprise that more have and will adopt online shopping proactively, making the market a profitable avenue for Indonesian businesses looking at a global expansion into China.
2. Rising middle class with more spending power
The ability to provide shoppers access to more purchase options alongside the convenience to shop from anywhere is characteristic of the e-commerce space. But what drove its growth significantly is the rising middle class who now also demand high-quality products when shopping online, opening up profitable opportunities for international businesses to take advantage of.
3. The effect of the pandemic
The COVID-19 pandemic impacted all countries of the world, but only a few were able to avail the opportunities that came with it. The biggest was to address the demand for online shopping and timely deliveries in view of social distancing restrictions. And with already profitable platforms like TMall (B2C), Taobao (C2C) and Alibaba (B2B), China was able to leverage the infrastructures further to effectively cater to the changing shopping behaviours of Chinese consumers who were carting out online in higher proportions than before.
Why retailers should look to China?
The tremendous e-commerce growth in the Chinese landscape offers amazing opportunities for businesses worldwide. The following reasons discuss why retailers should look towards China as the future of e-commerce.
1. Innovations in e-commerce
Chinese consumers are tech-savvy, which means e-commerce businesses can explore more innovative ways to market their products to them. Moreover, 80% of Asian customers now turn towards influencers and their reviews before making a purchase, a 2022 Neilson survey indicated. Of these, Chinese consumers revealed preferences for original and imaginative product demos by influencers. This means that businesses who want to get ahead of the competition in China can leverage live streaming to make a mark, a sector that is set to bring in a value of ¥4.9 trillion by 2023, Statista figures indicate.
2. More cross-border e-commerce trade zones
Another factor fueling the e-commerce growth in China is the establishment of special trade zones across the country. These trade zones provide relaxed regulations and streamlined processes for shipping and customs clearance when importing into and exporting from China to aid e-commerce activities. They also facilitate faster customs clearance.
27 more locations have recently been added to the cross-border e-commerce pilot zones, providing more opportunities for international businesses to reach a wider pool of Chinese consumers.
3. Social commerce
As of January 2022, there were 983 million social media uses in China, according to a report by We Are Social and Hootsuite. With 71% of Chinese consumers willing to shop through social media, according to Statista figures in 2020, e-commerce businesses have an effective avenue to tap on. Leveraging live streams, which is among the top 10 reasons Chinese consumers use social media for, is one way to establish greater mindshare and facilitate sales.
Partner with DHL Express to take advantage of Chinese e-commerce growth
There is no doubt that e-commerce is here to stay and China is its future. Entering the Chinese market can yield lucrative opportunities for local and international companies. However, to ensure business success, particularly in China’s e-commerce sector, partnering with a trusted logistics carrier is crucial.
DHL Express can help you venture into the growing Chinese online retail market with cost-effective logistics and customised solutions. Take advantage of China’s e-commerce growth by signing up for a DHL Express account today.
