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The sheer size of the Chinese ecommerce market makes it an enticing challenge for many Western businesses.
And to give an idea of exactly why brands like Burberry, ASOS and Selfridges are hoping to expand East, I’ve rounded up some stats which reveal the scale of the opportunity for online retail in China.
This post gives a good foundation for any ecommerce professionals with an interest in the Chinese market, and in future posts I’ll take a look at the major players within the industry, including Alibaba Group, Tencent and Baidu.
Or for more information, read our posts looking at how to approach social marketing in China and 30+ interesting stats about mobile commerce in APAC...
The size of the market
- According to official figures from the China Internet Network Information Center (CNNIC), by the end of December 2013 the country had 618m internet users, up by 53.58m year-on-year.
- This equates to a penetration rate of 45.8%, which increased by 3.7% on the previous year.
- China’s online population, at 618m, is twelve-times that of the UK and double that of the US. There are now 302m “e-shoppers” in China.
Chinese internet population (blue bars) and penetration (red line)
- The number of mobile internet users had reached 500m, showing annual growth of some 19.1%.
- By the end of December 2013, 247m Chinese were using the mobile web to watch or download videos, an increase of 112m people year-on-year.
- China’s ecommerce was worth 9.9 trillion Yuan overall in 2013, up 21.3% year-on-year. Online shopping topped 1.85 trillion Yuan, jumping 42.0% YoY.
- Mobile shopping surged to 167.64bn Yuan at an annual growth rate of 165.4%.
- The growth in ecommerce will be fuelled by China’s burgeoning middle class, which will account for as much as 70% of the population by 2030.
- Six out of every ten dollars spent online in Asia comes from China.
Shopping online everyday
- A global survey carried out by PWC found that more than half (53%) of Chinese respondents said they shop online using a PC every week.
- A further 8% said they shop online using a PC everyday, compared to 3% on a tablet and 4% on smartphone.
- Overall 14% of Chinese respondents said they shop online everyday, compared to a global average of 5%.
- Other findings from the study show that 77% of Chinese consumers shop on mobile phones and 66% shop on tablets.
- However it should be noted that only 900 Chinese consumers took part in the survey.
Third-party online payments
- Unlike Western markets, credit card payments are not the dominant payment method.
- In 2004 Alibaba launched Alipay, an online payment escrow service and the rise of third party payment has been an enabler to a booming ecommerce market.
- According to data from iResearch, the Chinese third-party online payment market was worth 5372.98bn Yuan ($870.33bn) in 2013, a YoY increase of 46.8%.
- Alipay hoovered up almost half of this market, accounting for 48.7% of third-party online transactions. Tenpay came second with 19.4%.
China third-party online payments marketshare 2013
- Merchants pay a fee to these third-party payment providers, on average less than 1% of the purchase price.
- Alipay’s escrow service holds a payment in a dedicated account until the customer confirms that the purchased goods have been delivered as advertised.
- Tenpay mainly operates in the B2B market and in consumer use of Tencent’s various entertainment services.
- WeChat Payment uses Tenpay’s payment infrastructure and can be used to purchase movie tickets, pay utility bills, re-charge phones and to pay for a variety of other services.
- The Chinese ecommerce market is predicted to continue its rapid rate of growth over the next few years.
- According to data from iResearch, Chinese ecommerce GMV rose to 9.9 trillion Yuan in 2013 at a decelerating year-on-year growth rate of 21.3%.
- It is predicted to continue growing at a steady rate up to 21.6 trillion Yuan in 2017.