SHANGHAI — The Chinese e-commerce market is set to hit 19.6 trillion renminbi, or $3 trillion, in 2024, up from 13.8 trillion renminbi, or $2.1 trillion, in 2021, a forecast from GlobalData said.
The forecast put compound annual growth rate over the next four years at 12.4 percent. This year, e-commerce sales in China are expected to register 17.2 percent growth as consumers increasingly shift from offline to online due the COVID-19 pandemic.
While overall consumer spending last year in China dropped 3.9 percent, online took up more share of national retail sales, with e-commerce increasing by 14.8 percent in the same period. In the first quarter of this year, China retail sales were up 33.9 percent from a year ago, benefiting from a low base effect when China was worst hit by the virus. Compared to the previous quarter, retail sales increased by 1.86 percent.
Mobile wallet solutions Alipay and WeChat Pay are the most popular payment methods for online transactions in China, and together account for over half of total e-commerce sales in the country.
“While Alipay benefits as a primary payment tool on all the e-commerce platforms owned by the Alibaba group, WeChat Pay, which is offered by WeChat messaging app, leverages its massive 1.2 billion social media user bases to push online payments. As Chinese consumers continue to embrace e-commerce, these payment solutions will be greatly benefited,” Global Data said.
“New payment models such as ‘buy now, pay later’ are being launched to gain share of the largest e-commerce payment market. In March 2020, Tencent introduced Fen Fu, a credit feature in its WeChat app, allowing users to shop and pay later in installments. Alipay offers similar ‘buy now, pay later’ service called Huabei.”