China online shopping market forecast 2017-2019
Total transactions of China's eCommerce shopping market totalled 4.7 trillion yuan (US$680 bn) in 2016 with an increase of 23.9%; and, it's now estimated to reach 7.3 trillion yuan (US$1.06 trillion) in 2019.
Tmall dominates China's B2C online shopping market with over 56% market share.
B2C online shopping market will grow to over 60% in 2019 from 55.3% in 2016 while C2C continues to shrink.
China’s online retailing market will grow to $1.7 trillion by 2020
Goldman Sachs expects penetration to increase from 16% last year to 25% in 2020, up from a previous forecast of 22%.
While there have been concerns of a slowdown following the deceleration in growth to mid-20% in 2016, they expect online retail growth to continue to grow at a rate of 23% CAGR over 2016-2020, continuing to grow at nearly triple the pace of offline retail.
Goldman expects China’s online and offline FMCG market to reach $2 trillion by 2020, with online penetration rising from just 5% last year to 13%.
Top eCommerce brands in China
The top e-commerce platforms in China are JD, Tmall, and YHD in 2016 according to Kantar Retail.
Top 10 e-commerce platforms in 2016 based on comments from more than 200 participants from FMCG manufacturers are:
1.JD 2.Tmall 3. YHD 4.vip.com 5.Amazon 6.Suning 7.Jumei 8.Xiaohongshu 9.sfbest.com 10.Feiniu
The top roles of e-Commerce according to the Kantar survey are as follows;
- Additional sales channel
- Brand building
- Stronger communication with consumer/shoppers
- Penetrating lower-tier cities or markets
- Additional profit
- An efficient way to enter new brands / new products into the China market
Alibaba’s top shoppers spend an average of $45,000 a year online
Read more: https://www.chinainternetwatch.com/19247/alibaba-apass/#ixzz4cjHb0WTTAPASs, or Alibaba Passport, is a membership program in which members are assigned personal account managers and organizing special events like wine tastings and automobile test drives.
APASS members are Alibaba’s top shoppers who are mostly young, internet-savvy and increasingly affluent members of China’s rising middle class. Each member spends at least amount of US$15,000 a year on Taobao/Tmall. And, that’s also the requirement to qualify for the membership.
The average annual spend among current APASS members is about $45,000. During Alibaba’s recent Double 11 Global Shopping Festival, a 24-hour online sale, APASS members spent nearly eight times as much as the average consumer shopping on Alibaba’s platforms.
Taobao/Tmall Users vs Tmall Global Users
Tmall Global was officially launched on Feb 19 2014 by Alibaba which is designed for supplying imported goods for domestic consumers.
Tmall Global, now a leading retail cross-border e-commerce platform, has 12 national pavilions including Korea, the United States, Britain, France, Spain, Switzerland, Australia, New Zealand, Singapore, Thailand, Malaysia, and Turkey as of June 24 2015. Jingdong, or JD.com, launched a competing platform JD Worldwide last year.
China Eclipses the US to Become the World's Largest Retail Market
Mobile now accounts for more than half of all ecommerce sales in China
In 2016, China will surpass the US to become the world’s largest retail market with total sales of $4.886 trillion, compared with $4.823 trillion in the US, according to eMarketer’s latest worldwide retail forecast.
China will also remain the world’s largest retail ecommerce market, with sales expected to top $899.09 billion this year, representing almost half (47.0%) of digital retail sales worldwide.
With China having one of the most developed ecommerce markets in the world, it is expected that purchases made digitally will represent a globe-topping 18.4% of the country’s total retail sales this year. China will continue to see massive gains in retail ecommerce over the next few years, with sales topping $2.416 trillion in 2020. Spending via mobile is also booming and this year will account for 55.5% of all ecommerce sales and reach 68% by 2020.
China’s booming ecommerce market can be attributed in part to the proliferation of the dominant domestic marketplaces such as Alibaba, Tmall and JD.com, which took advantage of the country’s undeveloped traditional retail infrastructure. “Alibaba, Tmall and JD.com positioned themselves well to capitalize on growing consumer demand by creating their own payment systems (e.g., Alibaba’s Alipay) and logistical services (e.g., JD.com operates a self-owned logistics network). “In addition, with rising incomes and increased internet access in rural areas the cultural appetite to shop digitally will continue and we can expect to see further growth in mobile spend,”
Asia-Pacific as a whole remains the world’s largest retail ecommerce market, with sales expected to top $1 trillion in 2016 and more than double to $2.725 trillion by 2020. According to market watchers forecasts, the region will also see the fastest rise in retail ecommerce sales, climbing 31.5% this year. Expanding middle classes, greater mobile and internet penetration, growing competition of ecommerce players and improving logistics and infrastructure will all help to fuel ecommerce growth in the region.
Asia-Pacific will continue to lead all regions in total retail sales with $8.997 trillion this year, accounting for 40.8% of the global total. Burgeoning consumer economies in China, India and Indonesia will drive retail sales over the next four years as disposable incomes in those countries continue to rise.