Sector Trend Analysis – E-commerce trends in China

Country economic profile

According to Euromonitor, The population in China reaches 1,411.75 million in 2024, the second largest after India in the world: 1,450.94 million. It constitutes 17.4% of the world population. There are fifty six nationalities in China, among which Han is the biggest nationality at 91.7%.

In 2023, the gross domestic product (GDP) of China amounted to US$17.9 trillion. GDP growth rate: 3.0% annual change in 2023 (World Bank).

Income and expenditure

In 2023, China held sixth position among 22 Asia Pacific nations in terms of average gross income, which amounted to USD8,750. The country recorded a notable growth regarding per capita disposable income levels, which increased by 5.9% in real terms in 2023, compared with the 0.8% growth witnessed in 2022. The surge in consumer income was primarily driven by an expanding economy, a decrease in unemployment rates and an increase in labour productivity. In 2023, China experienced a 5.4% real terms increase in per capita consumer expenditure, driven by increasing disposable income, a lower inflation rate and an expanding middle class. Over the year, inflation in China decreased to 0.2% from 2% in 2022. In fact, China had the lowest inflation rate in the Asia Pacific region in 2023 (Euromonitor 2024).

Global e-commerce retail market in China

In 2023, global e-commerce retail markets were valued at US$3.99 trillion, representing an increase in CAGR (compound annual growth rate) of 16.3% from US$2.2 trillion in 2019. China was the largest e-commerce retail market with US$1.3 trillion (33.4% market share) in 2023, followed by the United States (U.S) valued at US$1.2 trillion (29.8% market share) and the United Kingdom (U.K) with values of US$159.5 billion (4.0% market share).

In the forecast period, global e-commerce retail markets are expected to continue to experience increasing growth, with a CAGR of 11.9%, attaining US$6.2 trillion by 2028. Similarly, China is also expected to experience a positive CAGR of 12.6% as e-commerce retail sales reach US$2.1 trillion by 2028.

E-commerce market-internet users and social media users China

Internet users in China in 2023 reached 1.1 billion, an increase of CAGR 6.4% from 2018 to 2023. In 2023, 78.1% of population used internet, 83.5% of households with access to internet, 82.7% of households with access to broadband internet, 75.4% of internet access: once a week, 70.0% internet access: daily, 20.5% internet use: internet banking, 9.4% internet use: selling goods and services, 61.2% internet use: telephoning or making video calls, 62.2% of uses of a Laptop, notebook, netbook or tablet to access the internet, 98.0% of use of a mobile phone to access the internet. Population Internet Use: Selling Goods or Services recorded the highest growth at a CAGR of 13.9% from 2018 to 2023.

In 2023, 109.8 million used MOMO, 651.3 million used QQ, 38.2 million used Skype, 1,452.7 million used WeChat.

China's digital landscape

In 2023, online retail sales via mobile device were valued at US$1,278.8 billion, at the growth rate of CAGR 18.9% from 2018 to 2023, followed by purchases via personal computer US$225.4 billion at the growth rate of CAGR 12.3% from 2018 to 2023. App M-Commerce grew at a CAGR of 19.8%, mobile Web M-Commerce grew at a CAGR of 7.2%, mobile phone M-Commerce grew at a CAGR of 19.1% and Tablet M-Commerce grew at a CAGR of 9.6% from 2018 to 2023.

Forecasted growth is expected to continue at the rates varying from −1.3% (mobile web) to 10.7% (App M-Commerce) from 2023 to 2028.

In 2023, total online travel by device and platform were valued at US$164.5 billion, among which purchases via personal computer was US$39.4 billion. Purchases via App reached US$120.2 billion while purchase via Web reached $4.9 billion. Purchase via mobile phone reached US$112.6 billion while purchase via tablet reached US$12.5 million in 2023.

All device types made decreases in growth rates within the historic period, ranging from −18.3% (via Web) to −9.4% (via App) from 2018 to 2023. But all types increases in growth rates, ranging from 9.6% (PC E-Commerce) to 22.0% (mobile phone m-commerce) from 2023 to 2028.

Lodging e-commerce recorded the biggest expense at US$55.9 billion in 2023, followed by surface travel e-commerce at US$40.1 billion and air travel e-commerce at US$27.2 billion. Top three projected growth will be packages e-commerce at a CAGR of 24.7%, car rental e-commerce at 24.1% and experiences and attractions e-commerce at 24.1% too from 2023 to 2028 although they were at −22.1%, 0% and −14.2% from 2018 to 2023 respectively due to the Covid-19.

China's e-commerce market: retail sales

E-commerce sales reached US$1,504.2 billion in 2023 with the growth of CAGR 17.7% from 2018 to 2023. Other Products E-Commerce recorded the biggest growth of CAGR 23.1% followed by Foods E-Commerce at a CAGR 20.7% and Drinks and Tobacco E-Commerce at a CAGR 18.7% from 2018 to 2023.

First-party Marketplace E-Commerce enjoys the fastest growth of CAGR 23.0% followed by other E-Commerce retailer to a CAGR 21.2% from 2018 to 2023. Leisure and Personal Goods Specialist E-Commerce declines at a CAGR of −41.1% from 2018 to 2023.

Cross-border e-commerce

Cross border e-commerce retail sales in China were valued at US$147.7 billion in 2023 (9.8% market share), with domestic e-commerce retail sales representing US$1,356.4 billion (90.2% market share).

E-commerce market: retail sales of goods and services (foodservice)

In 2023, bill Payments E-Commerce By Device and Platform reached US$896.6 billion, Bill Payments M-Commerce reached US$711.7 billion followed by purchases via personal computer US$184.9 billion. Purchases via App reached US$590.2 billion while purchase via Web reached $121.5 billion. Purchase via mobile phone reached US$671.8 billion while purchase via tablet reached US$39.9 billion in 2023.

All device types made increases in growth rates within the historic period, ranging from 16.5% (via tablet) to 7.0% (PC E-commerce) from 2018 to 2023.

In 2023, Ticketed Entertainment E-Commerce By Device and Platform reached US$11.0 billion, Ticketed Entertainment M-Commerce reached US$9.8 billion followed by purchases via personal computer US$1.2 billion. Purchases via App reached US$8.95 billion while purchase via Web reached $828.3 million. Purchase vial mobile phone reached US$9.3 billion while purchase via tablet reached US$449.9 million in 2023.

Ticketed Entertainment E-Commerce By Device and Platform increased in growth by 5.1% from 2018 to 2023 while Ticketed Entertainment PC E-Commerce declined in growth by −8.3% from 2018 to 2023.

Livestreaming is a very popular form of e-commerce in the PRC where Key Opinion Leaders (KOLs) conduct live video broadcasts of themselves while they market different goods to their audiences. The pandemic has led to the rapid advancement and adoption of livestreaming. According to an Ali Research Institute report, livestreaming e-commerce users reached 388 million, accounting for 39.2% of the total Chinese citizens. The top five livestreaming platforms for live shopping are Taobao, JD.com, Douyin (Tiktok), Xiaohongshu (the Little Red Book or RED in English), and Kuaishou, with products ranging from jewelry and cosmetics to cars and real estate (China - Country Commercial Guide).

In 2023 Streaming Services E-Commerce By Device and Platform reached US$19.5 billion. Streaming Services M-Commerce reached US$19.0 billion followed by purchases via personal computer US$509.4 million. Purchases via App reached US$19.0 billion while purchase via Web was 0. Purchase vial mobile phone reached US$15.5 billion while purchase via tablet reached US$3.5 billion in 2023.

All device types made increases in growth rates within the historic period, ranging from 8.6% (via mobile phone) to 3.6% (via Tablet) except −20.0% (via PC e-commerce) from 2018 to 2023.

In 2023, foodservice sales by device and platform were valued at US$206.7 billion. Purchases via App reached US$197.5 billion while purchase via Web reached $5.9 billion. Purchase vial mobile phone reached US$195.3 billion while purchase via tablet reached US$8.1 billion in 2023.

All device types made significant increases in growth rates except via PC e-commerce (−7.5%) within the historic period, ranging from 28.6% (via App) to 16.3% (via Web) from 2018 to 2023.

Top e-commerce companies and brands China

Alibaba Group Holding Ltd and JD.com Inc were the largest companies in terms of e-commerce sales in China with retail values of US$472.6 billion and US$412.1 billion respectively in 2023. Of note, Walmart Inc accumulated the largest growth of 68.5% as sales increased from US$385.7 million in 2018 to the most recent value of US$5,243.4 million in 2023. In contrast Suning.com Co Ltd experienced the largest decline in growth rate (−4.0%), as sales declined from US$31.5 billion in 2018 to US$25.6 billion in 2023.

Tmall Marketplace (Alibaba Group Holding Ltd) and JD Marketplace (JD.com Inc) were the top e-commerce brands in China with US$441.7 billion and US$270.1 billion respectively in 2023. Pinduoduo Marketplace (PDD Holdings Inc) experienced the largest increase in growth rate (65.1%) as the value increased from US$18.2 billion 2018 to US$223.3 billion in 2023.

Opportunities for Canada

The Regional Comprehensive Economic Partnership ("RCEP") Agreement is a Free Trade Agreement ("FTA") between 15 countries: Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, Philippines, Singapore, Thailand, Viet Nam, Australia, China, Japan, Republic of Korea, and New Zealand.

It is the world's largest FTA, comprising about 30% of global GDP and about a third of the world's population. RCEP negotiations were formally launched at the 2012 ASEAN Summit in Cambodia and the Agreement was signed on 15 November 2020. The quorum for entry into force was met in November 2021.

The RCEP Agreement entered into force on 1 January 2022 for ten participating countries (Australia, Brunei Darussalam, Cambodia, China, Japan, Lao PDR, New Zealand, Singapore, Thailand and Vietnam). It has also entered into force for South Korea (1 February), Myanmar (4 March) and Malaysia (18 March).

In total, China has signed off 22 FTAs, which involve a total of 29 countries and regional blocs (including ASEAN, comprising 10 nations). A further 10 FTAs are currently under negotiation, while 8 more are under consideration.

For more information

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Sector Trend Analysis – E-commerce trends in China
Global Analysis Report

Prepared by: Hongli Wang, Market Analyst

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