China e-commerce payments to reach $3.6trn in 2028, forecasts GlobalData. Source: Shutterstock.com

The China e-commerce market is anticipated to grow at a compound annual growth rate (CAGR) of 9.9% between 2024 and 2028 to reach CNY25.4trn ($3.6trn) in 2028, driven by the ongoing shift in consumer preference from offline to online shopping, finds GlobalData, publishers of EPI.

GlobalData’s E-Commerce Analytics reveals that China’s e-commerce market registered 11.9% growth in 2023 to reach CNY15.4trn ($2.2trn), as consumers increasingly preferred online purchases.

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Ravi Sharma, Lead Banking and Payments Analyst at GlobalData, comments: “China boasts the largest e-commerce market globally. This is attributed to its massive population, increasing internet penetration (especially in rural areas), and advanced digital infrastructure. Online shopping events such as Singles’ Day, 618 E-Commerce Festival, and Shuangpin Online Shopping Festival have also contributed to ecommerce growth.”

As per the China Internet Network Information Centre (CNNIC), internet penetration in urban areas in China stood at 83.3% as of December 2023, while rural areas had a penetration rate of 66.6%.

In October 2021, the Ministry of Commerce, the Cyberspace Administration of China, and the National Development and Reform Commission jointly released a plan for e-commerce development during the 14th five-year plan, which covers 2021–25. This plan includes initiatives such as enhancing the country’s logistics network, establishing cross-border ecommerce zones, and expanding ecommerce to remote areas.

Alternative payment solutions dominate the e-commerce space in China with a combined market share of 65.9% in 2023

That is according to GlobalData’s 2023 Financial Services Consumer Survey. Alipay and WeChat Pay, with more than one billion worldwide users each, are the most popular alternative payment methods and have gained prominence due to their simplicity, speed, and convenience. International brands such as Samsung Pay and Apple Pay are also available in the market. 

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Alternative payments are followed by bank transfers and payment cards. Cards accounted for a 14.9% share of e-commerce transaction value in 2023. Credit cards are more preferred than debit cards due to the value-added benefits they offer such as interest free instalment payment options, reward programs, cashback, and discounts.

Sharma concludes: “The Chinese e-commerce market is expected to register upward growth trend supported by the government initiatives, robust payment infrastructure and high internet penetration. Alternative payment solutions driven by Alipay and WeChat Pay are likely to continue their dominance driven by their growing userbase and high merchant acceptance.”