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.

China's e-commerce is supported by activities in rural areas 

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.

China’s bet to conquer global e-commerce

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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The unusually warm February weather has increased the growth of online sales severely. It is the biggest growth in six months, according to IMRG Capgemini eRetail Sales Index. Even though sales in February were below the average five-year growth of +10.6% year on year, this warm weather-growth finally gives relief to online retailers who struggled recently.

The ‘Garden’ sector experienced the largest online sales growth due to the impact of the warm weather. Compared to last year, the sector grew by +33.3%. It is followed by ‘Health and Beauty’ with a +13.4% year over year increase. However, not all sectors were able to profit from this change in temperature. Electricals went down by -15.4% and gift-sales even decreased with -27.6%. The sales of clothing did not endure a drastic change (+0.9%). It was still too early in the year for spring collections to be released.

Spring

The principal consultant in retail customer engagement of Capgemini, Bhavesh Unadkat says: “February is usually a transitional month as spring lines take over the shop floor and clearance continues, especially online. In this regard, it is interesting to see that conversion was up over 20% on the year but sales only grew by 9%.”

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Men typically spend more money online than women. On average, men spent £255 online over a period of three months, whereas women spent £204. Another typical conclusion is that younger shoppers typically buy more frequently online than shoppers of an older age. On average, those aged between 18-54 years purchased seven items, compared to six for those over the age of 55 years old.

A rising trend in the use of social media sites to shop online can be seen. One in five consumers in the UK purchased an item after seeing something on social media. Typically, consumers following in the following groups, younger shoppers (48 percent), women (29 percent) and those living in urban areas (38 percent),  are significantly more likely to have purchased items after seeing posts on social media.

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China
China and the APAC-region were driving global online sales. Chinese e-commerce retailers enjoyed significant double-digit growth at nearly 23 percent. In the first half of 2018, the online share of technical consumer goods sales in China reached over 30 percent. Unlike the US and Europe, where internet penetration levels are at 80 percent or higher in most countries, China’s internet penetration is still low at 55 percent as much of its population is located rurally. However, further investments in China’s infrastructure will set the ground for the further growth of internet usage - and thus - online sales. The Chinese e-commerce giants from China will focus on product categories in Europe, mostly in products that have shown some high levels of online growth during the first half of this year. Examples of these categories are telecommunication (21%), consumer electronic goods (22%) and small domestic appliances (28%). “These are the products to watch for increasing levels of online sales activities,” GfK writes.

M-commerce
The growing number of tech-savvy consumers increases the number of consumers using a smartphone or tablet to buy products online. The mobile device will become ever more important in Europe as a shopping tool. Here, the influence of Chinese e-commerce giants can be seen, as they are well positioned in the area of m-commerce through many years of experience in their home markets.

Competitive advantages for European key players
According to GfK, strong alliances amongst key players in Europe will be able to address these new challenges in the retail sector. Partnering retailers will take competitive advantage of their unique omnichannel selling propositions – allowing them to bring the best on- and offline shopping experience to their customers through new technologies, joint innovation activities, and co-investments into big data analytics. As much as the ongoing changes in Europe can be seen as most disruptive for technical consumer goods retailing, ‘traditional’ retail has not lost its attraction: The percentage of consumers who believe that physical stores today are less important than a few years ago has not changed over time (2015: 43 percent vs 2018: 43 percent).

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The research by Ecommerce Europe indicates that the United Kingdom (€178 billion), France (€93,2 billion) and Germany (€93 billion) dominate the European market, accounting for over two-thirds of the total European e-commerce turnover. Looking at popular websites, it is not surprising to see that Amazon and eBay are dominating the market. The research, however, shows that Alibaba Group is slowly moving in from the Eastern countries.

European Cross-border shopping 
Looking at cross-border e-commerce, Macedonia and Portugal are the countries where cross-border online purchases take place most (both 85 percent), followed by Luxembourg (79 percent), Switzerland (64 percent) and Iceland (63 percent). The fastest grower in the cross-border market is Slovenia (6 percent), followed by Luxembourg, the Netherlands, Germany, and Finland (5 percent) last year. In total, 38 percent of all online shoppers in Europe did a cross-border order in 2017.

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