China’s eCommerce market is set to grow by 13.3% says an analysis by GlobalData’s E-Commerce Analytics report. GlobalData is a data and analytics company. Innovation in e-commerce services, increasing consumer confidence and improving e-commerce activities in rural areas will drive the Chinese market. The market is expected to grow at a compound annual growth rate (CAGR) of 13.3%. This is from an estimated CNY10.7 trillion (US$1.5 trillion) in 2019 to CNY17.5 trillion (US$2.6 trillion) in 2023. 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, suggested, “Rising consumer preference of online shopping, the proliferation of alternative payment solutions. In addition, online shopping events such as Singles Day offering lucrative discounts and improved logistic infrastructure supports e-commerce sales.”
The China eCommerce market
Alternative payment solutions are increasingly being used for e-commerce purchases. Alternative payment solutions accounted for 70% of total e-commerce transaction value in 2019, according to GlobalData’s Banking and Payments Survey.
Comfort, security and convenience are cited as important factors by survey respondents for using alternative payments for online purchases.
The China market continues to be dominated by domestic payment solutions. Alipay remains the most popular alternative payment solution with 55.7% share, followed by WeChat Pay with 10.4%. International payment solutions – Apple Pay, Samsung Pay, PayPal, Masterpass and Visa Checkout are also strengthening their presence in this marketplace.
Sharma concludes, “There has been a growing preference for faster convenient payment options, especially among millennials. This has boosted the share of alternative payment solutions like Alipay and WeChat Pay in China.”
The other side of Asia
According to GlobalData, growing numbers of smartphone users and favourable government initiatives are also set to drive the Philippines’ e-commerce market. The research group has predicted growth at a compound annual growth rate (CAGR) of 15.7%. This is from an estimated PHP205.5bn (US$3.9bn) in 2019 to PHP368.3bn (US$7.0bn) in 2023.
GlobalData’s E-Commerce Analytics reveals that the eCommerce market in the Philippines is one of the fastest growing in Southeast Asia. Between 2015 and 2019 the e-commerce transaction value grew at a CAGR of 26.4%.
Sharma says, “Rising consumer preference for online shopping, wider availability of online merchants, pricing benefits on online purchases. Furthermore, the proliferation of alternative payment solutions remained the key driving factors behind e-commerce sales over the last four years.”
According to GlobalData’s 2019 Banking and Payments Survey, payment cards were the preferred mode for e-commerce purchases in the Philippines. They accounted for 43.1% in 2019. Alternative payment solutions accounted for 23.6% of the total e-commerce transaction value in 2019.
Enterprise Times: What this means for business
Some of the most innovative smart city digital transformation developments are taking place in China and across Asia. Consequently, its not surprising that at a macro-level consumers are adopting efficient payment methods. Traditional payment tools continue to dominate the e-commerce purchases in most Asian countries. However, alternative payments solutions will be increasingly preferred, especially by tech-savvy millennials. These millennials want and demand faster and more convenient payment options.