China embracing e-commerce
August 20, 2019 Category Macro-economy, Weekly
China is actively embracing the burgeoning e-commerce sector, generating CNY4.82 trillion in online retail sales during the first six months of this year. Online retail sales surged 17.8% year-on-year in the first half, accounting for nearly 20% of the overall retail sales of consumer goods.
During the first half, business-to-consumer (B2C) online retail accounted for about 75.8% of the online retail market, a 4.1 percentage points rise from the same period last year. Specifically, sales of consumer goods such as cosmetics, smart home, and healthcare products increased rapidly, with year-on-year growth exceeding 30%. Chinese major e-commerce platforms continued to break records in online sales during this year’s shopping festival from June 1 to 18. JD said sales for the 18-day festival period hit CNY201.5 billion, compared with CNY159.2 billion in 2018. Alibaba also reported strong sales for the annual shopping event, with more than 110 brands on its Tmall platform reporting a turnover of over CNY100 million.
Statistics from the Ministry of Commerce (MOFCOM) showed online retail sales in rural areas reached CNY777.13 billion in the first half of this year, up 21% year-on-year. Agricultural products’ online retail sales amounted to CNY187.36 billion in China in the first half, a year-on-year increase of 25.3%
Cross-border e-commerce maintained rapid growth in China. In the first half, major cross-border e-commerce platforms witnessed an over 20% year-on-year increase in sales of imported goods. The top three countries from which China imported goods through e-commerce are Japan, the United States and South Korea, mainly cosmetics, cereals, oils and foodstuffs, and daily necessities. Large cities have seen a significant jump in retail sales of fresh food, cosmetics and pet supplies. The retail sales of clothing, automotive products and household appliances increased rapidly in small- and medium-sized cities and rural areas. Alibaba Group is upgrading its wholesale business by adding a new sourcing channel to better facilitate cross-border trade, particularly for small- and medium-sized enterprises. According to company figures, Alibaba.com serves 150 million registered users around the world, by giving suppliers the tools needed to reach a global audience, and helping buyers target products and suppliers across 200 economies in an efficient manner. Ant Financial, Alibaba’s financial arm, supports transactions in 22 currencies and can settle local payment in 56 economies. Alibaba.com is also seeking to launch a special digital zone featuring Yiwu, China’s hub for exports of small merchandise, in a bid to smooth cross-border transactions for millions of SMEs, part of the electronic World Trade Platform (eWTP), an initiative Alibaba proposed in 2016 to facilitate trade for global SMEs through digitalization.
According to eMarketer, China’s e-commerce sales are estimated to increase more than 30% to USD1.99 trillion in China this year, accounting for 35.3% of the country’s retail sales. The U.S. lags far behind, with only 10.9% of its real sales occurring online.
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