Research from McKinsey & Co has pointed to the fact that the Chinese ecommerce market has become the second largest in the world behind only the USA. Analysts predict that it will become the largest market of its kind sometime next year if not sooner. While there are some differences in the way that the Chinese use ecommerce, and the types of site they tend to use predominantly, they are clearly leading the way in ecommerce growth in 2013.
China has become known as a burgeoning market for many sectors and industries and while some growth in etail sales is to be expected in such an emerging economy, the growth has proven greater than most thought. It has seen a calculated annual growth rate of 120% in the past 10 years, compared to just 17% in the US.
Person to person sales are the most common types of online retail in China, accounting for approximately 70% of all online sales. This includes the use of sites like and similar to Ebay, including Tmall and PaiPai but the trend of using sites similar to Amazon is also increasing as more and more larger ecommerce stores throw their hats into the ring.
Other aspects of the online retail market in China differ too. Online ordering is often combined with bicycle courier to ensure same day delivery; something that most people in the Western World could only imagine. Cash on delivery is not an unusual concept for such purposes, giving consumers the opportunity to check the product before they pay and buy it.
In terms of where the majority of ecommerce purchases are made, it is the largest cities where the majority of sales are obviously made but those living in lower income and lower tier cities actually spend as much per person and a higher percentage of their total income when compared to those in major, tier 1 cities. It is believed that this is because those in the smaller cities and more remote areas do not yet have access to the same shops and opportunities as those in larger cities. There may also be an element of finding the best deal and saving money for low income individuals.
Last year alone, China spent $190bn in online sales and the authors of the report predict that this will rise to $420bn by the year 2020. What’s more, they say that China will overtake the USA as the world’s leading ecommerce market next year and that the transition may actually occur sooner than this.
The report says that not only are ecommerce purchases replacing purchases from bricks and mortar stores but they are providing consumers with access to items they could never have purchased before and this means that etail sales are continuing to increase at a very high rate. Currently, the Chinese ecommerce market makes up around 6% of the country’s total retail spend comparing favourably to the 5% share in the USA and this, combined with the number of people in the country, has helped propel the Chinese industry to become the second biggest online spender in the world.
