China is poised to become the first country in history to see a majority of retail sales made online instead of from traditional brick-and-mortar stores, according to a new report.
Digital marketing research firm eMarketer is predicting that 52.1 percent of the country’s retail sales will come from ecommerce in 2021, up from 44.8 percent a year prior. The country with the next highest proportion of online retail sales is South Korea with 28.9%, the report states.
The growth in ecommerce enthusiasm in China has been driven not just by Covid-19, but also by the rise of social ecommerce, mostly through social media channels (such as WeChat’s Mini Program and China’s TikTok, Douyin) as well as livestreaming “live ecommerce” on platforms such as Taobao.
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“Thanks to the early availability of affordable smartphones and their rapid proliferation, online retailers in China have had to be mobile-centric since day one,” the eMarketer report says. “This in turn has driven greater mcommerce [mobile commerce] innovation, which itself has proven key to unlocking ever-greater consumer spending.”
This historic milestone is unlikely to be met with much surprise among China’s urban-dwelling young consumers. For many, online retail sales are a natural part of life. Over the past decade, China’s emerging digital payments systems (such as Alibaba’s Alipay and Tencent’s WeChat Pay) and smartphone-driven mcommerce culture have skyrocketed.
The global pandemic undoubtedly accelerated the shift towards digital, but online shopping culture has been a major part of China’s economic boom for years, as evidenced by shopping festivals such as Alibaba Singles’ Day and JD’s 618 Festival. The presence this year of ecommerce livestreaming star Viya on a youth-centric prelude to CCTV’s Spring Festival Gala (China’s biggest annual TV event) was another sign of just how embedded such practices are in the Chinese mainstream.
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The rise and rise of ecommerce is not without controversy however. Click farms, fake sales, and the environmental impact of convenient, heavily-packaged deliveries are among the related issues that regularly spark headlines and heated online discussions over regulation of the industry. Added to that, work practices at China’s ecommerce giants are increasingly under scrutiny, with one of the most recent waves of criticism triggered by the death of a young Pinduoduo employee in December of last year, reportedly due to overwork.
Such conversations are likely to continue looming large as ecommerce becomes the norm for many of China’s shoppers.
