Innovation in e-commerce services, increasing consumer confidence and improving e-commerce activities in rural areas are set to drive the e-commerce market in China to grow at a compound annual growth rate (CAGR) of 13.3% from an estimated CNY10.7 trillion (US$1.5 trillion) in 2019 to CNY17.5 trillion (US$2.6 trillion) in 2023, according to GlobalData, a leading data and analytics company.
An analysis of GlobalData’s E-Commerce Analytics reveals that between 2015 and 2019 the e-commerce market in China grew at a CAGR of 21.5%.
Ravi Sharma, Senior Analyst at GlobalData, comments: “Rising consumer preference of online shopping, proliferation of alternative payment solutions, online shopping events such as Singles Day offering lucrative discounts and improved logistic infrastructure supported e-commerce sales.”
Alternative payment solutions are increasingly being used for e-commerce purchases. Alternative payment solutions accounted for more than 70% of total e-commerce transaction value in 2019, according to GlobalData’s 2019 Banking and Payments Survey.
Comfort, security and convenience are cited as the most important factors by survey respondents for using alternative payments for online purchases.
Alipay remains the most popular alternative payment solution with 55.7% share, followed by WeChat Pay with 10.4%. Apart from the dominance of domestic payment solutions, international payment solutions such as Apple Pay, Samsung Pay, PayPal, Masterpass and Visa Checkout are also gradually strengthening their presence in the Chinese e-commerce market.
Sharma concludes: “The growing preference for faster and more convenient payment options, especially among millennials, boosted the share of alternative payment solutions like Alipay and WeChat Pay in China.”