E-commerce in China has developed rapidly over the past five years, aided by high levels of internet and smartphone penetration, increasing consumer confidence in online shopping, the emergence of e-commerce platforms, and the availability of various alternative ones Payment solutions such as Alipay and WeChat Pay. According to the e-commerce analytics from GlobalData e-commerce revenue in China grew at a CAGR of 17.7 percent between 2017 and 2021 to reach $ 2.1 trillion in 2021.
Corona pandemic drives e-commerce in China
Ravi Sharma, Senior Analyst, Banking and Payments at GlobalData, comments: “The Covid-19 pandemic has fueled e-commerce in China as concerned consumers increasingly use online channels to make purchases. In this way they avoid being exposed to disease carriers. A trend that is expected to continue beyond the pandemic. ”
Although the Covid-19 crisis has caused a slump in general consumer spending, it has resulted in a growth in e-commerce purchases. Areas such as travel and accommodation as well as catering services were particularly affected due to bans and travel restrictions. In contrast, there has been strong growth in online purchases of physical goods.
Increasing use of online payments
Alternative payment solutions in particular benefited from the increase in e-commerce purchases. Alternative payment solutions like Alipay and WeChat Pay (including Tenpay) together account for 57.6 percent of total e-commerce value in 2021, according to GlobalData Financial Services Consumer Survey. As the primary payment solution, Alipay offers advantages on all platforms of the Alibaba Group. WeChat is offering Pay, which is offered by the WeChat messaging app, to its 1.2 billion social media users to drive online payments.
As Chinese consumers continue to prefer e-commerce, online payment solutions will benefit greatly. “The Chinese e-commerce market has grown over the past five years. A significantly increased consumer preference for online channels during the pandemic, combined with the proliferation of online payment tools and the emergence of new e-commerce formats, will continue to drive e-commerce growth in China, ”reports Ravi Sharma. (sg)
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