How E-commerce is Changing China… and Beyond | Teleperformance
How E-commerce is Changing China… and Beyond

It’s no secret that e-commerce in China is booming. China does not only have the largest e-commerce market in the world, but also the most innovative and widely used by different consumer demographics.

According to recent research by Statista, online sales in B2C e-retail in 2017 were USD $499,150 billion, which was up from $403,458 billion in 2016. That already sounds impressive, but the projected data for 2022 is at $956+ billion. The market is expected to more than double in size over the next few years alone.

Chinese GDP growth is around 6.9% and although this is lower than it has been, it is still enough to drive very strong economic growth—any European leader would love to be managing growth of 7%. Chi Lo, of BNP Paribas Investment Economist for China said: “The Chinese economy is going through a phase of ‘creative destruction’ as lively new economy sectors like e-commerce and online financial services coexist with still-dominant old economy sectors.”

Now the US technology giant Google has announced plans to enter the Chinese e-commerce market by investing in JD.com. Google has spent $550 million in cash to create a strategic partnership where the two companies will work together to create an improved retail infrastructure in several Asian markets, including South East Asia. In return for the cash investment, Google has received 27 million Class A shares in JD.com, so the success of this joint venture is in the best interest of both companies.

This looks like a smart investment. During the JD.com-sponsored “618 Mid-Year Shopping Festival” earlier in June (June 1 to 18), Chinese customers spent almost $25 billion. Tencent, Alibaba, and Baidu are all bigger than JD.com, but this strategic partnership with Google could be an important new trend for China and the global e-commerce market.

In China, social media drives around 50% of all e-commerce. The importance of thinking about retail in a completely different way in China cannot be overstated. WeChat has led the way, by ensuring that social communication and payment services are all available in a single app. The functionality of the app has led many retailers to completely rethink how they sell to customers in China.

It’s likely that the Chinese experience may now start flowing back to the US because of the Google investment and partnership. This would be an extremely interesting development because the US and European markets have established social networks and messaging platforms, but there is no single company or app that offers a complete messaging, social, and payment service all in one place.

Whoever can take the Chinese experience and apply this in the US market will not only succeed from the popularity of the app, but they will reshape how American retail works, and this is an industry that is already struggling with the existing levels of e-commerce.

It’s worth watching the big Chinese e-commerce companies closely this year. I think that we are going to not only see enormous growth in China, but the Chinese development of tools like WeChat may finally start to influence and change other markets.

Let me know what you think about Chinese e-commerce trends by leaving a comment here or get in touch via my LinkedIn.


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