China retains global e-commerce leadership with a 9.9% growth in their e-commerce market, according to GlobalData's forecast, which predicts the Chinese e-commerce market will grow to CNY15.2 trillion ($2.2 trillion) at the end of 2023.
According to GlobalData's E-Commerce Analytics, e-commerce sales in China grew at a compound annual rate of 11.2% between 2018 and 2022 to reach CNY13.8 trillion ($2.0 trillion) in 2022.
China accounted for 33.9% of the global e-commerce market in terms of payment value in 2022. The United States followed China with $1.8 trillion, while the United Kingdom was a distant third with $287.4 billion in 2022. "The picture is unlikely to change in 2023, and China is expected to maintain its position at the top," GlobalData advances.
Improved e-commerce activities in rural areas also support growth in the e-commerce market. According to the Chinese Ministry of Commerce, online retail sales in rural areas increased by 12.5% during the first half of 2023 compared to the same period in 2022.
Similarly, live shopping has been a trend in the country, allowing consumers to view and purchase products through online video streams hosted on e-commerce platforms. In addition, social commerce is growing in popularity thanks to messaging platforms such as WeChat.
"The Chinese e-commerce market will continue to grow supported by increasing consumer preference for online shopping, improving payment infrastructure and proliferation of payment tools. The e-commerce market is expected to grow at a robust CAGR of 11.6% between 2023 and 2027 to reach CNY23.5 trillion (US$3.4 trillion) by 2027," concludes Sharma.
Part of China’s e-commerce global dominance is due to the rapid expansion of marketplaces like Pinduoduo - part of Temu - which recently launched its U.S. online shopping site.
Pinduoduo’s Temu is a cross-border e-commerce website with most products likely to come from overseas, especially China. Temu said shipping to the U.S. could take 7-15 business days.
Pinduoduo could face some challenges in cracking the U.S. market. First, it will need to build a brand reputation versus the likes of Amazon. It could also suffer from its relatively long shipping times versus the same-day or next-day deliveries Amazon offers via its Prime subscription services.
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