The COVID-19 pandemic has accelerated the uptake of e-commerce on a global scale, as consumers worldwide turn to online purchases in the face of lockdown restrictions. This growth is set to continue, with the global e-commerce market expected to reach a market size of US$5.5 trillion in 2022, as reported in Shopify’s Global Ecommerce Sales Growth Report for 2021-2026.
Though there is overall growth in e-commerce markets worldwide, it is far from evenly distributed. And China sits at the forefront of this growth as the now-biggest e-commerce market, having contributed to more than half of the total sales in the global e-commerce industry.
From accounting for less than 1% of the global e-commerce market a decade ago, China’s e-commerce market share has since grown to the point where its sales exceed that of Europe and United States combined, according to Statista. The success of e-commerce in China is undeniable, and many are now looking to replicate this success — governments for their nations’ economy, and individual businesses for their bottom-lines. But what exactly is driving the success of Chinese e-commerce companies?
Here are three primary factors that have contributed to their success:
Statista also reports that China has over 1 billion internet users, which is more than the number of people living in the United States, Indonesia, and Brazil combined — three of the world’s most populous countries. This—combined with lower prices resulting in high local consumption—are one of the three factors that supports the success of e-commerce companies in China.
Though this is an area that cannot be wholly replicated due to geopolitical conditions, companies looking to ramp up e-commerce sales worldwide can still capitalise on the evidenced relationship between internet usage and e-commerce. International markets that are experiencing increasing internet adoption rates due to industrialisation and modernisation efforts can be reframed as areas of potential business opportunities.
The second factor that supports China’s unprecedented success in e-commerce is its high mobile penetration rate of 98% on the authority of Statista, and its adoption of mobile payment methods having grown from 25% in 2017 to 87.3% by 2022, as maintained by payment experts Merchant Savvy. E-commerce sites in China have taken advantage of these promising trends to optimise mobile shopping experiences and integrate a wide array of convenient mobile payment options.
A seamless shopping experience is no longer a competitive advantage in the e-commerce scene; it is mandatory. On top of that, Forbes reports that consumers are now looking for effortless checkout and payment experiences. Businesses and e-commerce sites should look to improve mobile-friendliness for their online shopping channels, be it through creating an app or optimising their website for mobile browsing and navigation. Integrating a range of mobile payment options can also help alleviate close to 10% of online shopping cart abandonment cases, as highlighted by Baymard Institute in their 2023 list of cart abandonment statistics.
Lastly, China’s e-commerce market is well supported by a vast eco-system of delivery networks and systems allowing for prompt deliveries despite the sheer size and scale of the country. Alibaba, for example, runs an entire cross-country network that manages and delivers 30 million items each day. JD.com also provides same-day deliveries for all local orders made before 11am, and next-day deliveries for all orders placed thereafter.
Short delivery times and swift order fulfilment are key to successful checkouts and repeat purchases in today’s e-commerce market, and companies that look to replicate the success of China’s e-commerce companies must provide this to the best of their abilities. Choosing the right last-mile delivery services can allow you access to extensive global reach and customs expertise – ensuring your customers receive their parcels quickly and efficiently.
In summary, companies looking to advance their e-commerce market share can replicate the success of Chinese companies by:
looking to emerging markets with surging internet adoption,
preparing more mobile payment options and a seamless checkout experience for consumers, and
providing customers with fast shipping options and swift order fulfilment.