China’s e-commerce value is set to skyrocket to more than US$3 trillion in the next four years, as consumers increasingly shift from physical to digital shopping, according to the latest study by research firm, GlobalData.
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China, the second largest global economy, will see its e-commerce market value grow at a CAGR of 11.6 percent between 2021 and 2025, registering e-commerce sales of US$3.3 trillion in 2025.
Meanwhile, China’s e-commerce growth is on track to hit 17.2 percent in 2021, added GlobalData.
“The Covid-19 pandemic has further driven e-commerce activities in the country, as concerned consumers are increasingly using online channel for their purchases to avoid getting exposed to disease vectors, a trend that is expected to continue even beyond the pandemic,” said Ravi Sharma, Banking and Payments Lead Analyst at GlobalData.
The projections come on the back of stellar e-commerce growth in China in the last four years. E-commerce sales in China grew at a CAGR of 17.7 percent between 2017 and 2021 to reach the value of US$2.1 trillion in 2021, added GlobalData.
“Chinese e-commerce market has been on a rise during the last five years. A significant rise in consumer preference for online channels during the pandemic coupled with proliferation of online payment tools and emergence of new e-commerce formats will further drive e-commerce growth in China,” continued Sharma.
The sale of physical goods has seen the most growth in China’s e-commerce market, while sectors such as travel and accommodation, and restaurants services have been affected due to lockdown and travel restrictions.
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Alternative payment solutions, including Alipay and WeChat Pay (including Tenpay), have been the largest beneficiaries from rising e-commerce purchases. China’s alternative payment solutions collectively account for 57.6 percent of total e-commerce value, according to GlobalData’s 2021 Financial Services Consumer Survey.
China’s National Bureau of Statistics reported the nation’s August retail figures grew 2.5 percent, well below the 7 percent growth forecast by analysts polled by Reuters.