Farmers sell sweet potatoes on livestreaming platform. (PHOTO: VCG)

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China is to retain its dominant position in the global e-commerce landscape. On August 29, GlobalData, a leading data and analytics company, forecasts that the Chinese e-commerce market is anticipated to surge to 15.2 trillion RMB in 2023, driven by the ongoing shift of consumer preferences from offline to online shopping.

Dominant position in the global e-commerce

According to GlobalData, e-commerce sales in China grew at a CAGR (compound annual growth rate) of 11.2 percent between 2018 and 2022, reaching a value of 13.8 trillion RMB in 2022. China accounted for a 33.9 percent share of the global e-commerce market in terms of payment value in 2022. The global e-commerce landscape is unlikely to change in 2023 with China expected to retain its position at the top.

"The Chinese e-commerce market evolved rapidly during the last five years, supported by the rapid adoption of smartphones, growing internet penetration, increasing number of online shoppers, and the availability of alternative payment solutions such as Alipay and WeChat Pay," said Ravi Sharma, lead banking and payments analyst at GlobalData.

Livestream shopping to attract more attention

GlobalData's analysis showed that the growth in the e-commerce market is also supported by the improving e-commerce activities in rural areas. Livestream shopping has been a trend in the country.

Livestream shopping allows customers to view and buy products via online video streams hosted on e-commerce platforms. In addition, social commerce is growing in popularity thanks to the efforts of messaging platforms such as WeChat. Sub-apps offered by WeChat run within the WeChat app, allowing users to buy products without having to download other mobile apps or be redirected to other websites.

"The Chinese e-commerce market will continue to grow supported by the rise in consumer preference for online shopping, improved payment infrastructure, and proliferation of payment tools. The e-commerce market is expected to grow at a robust CAGR of 11.6 percent between 2023 and 2027 to reach 23.5 trillion RMB in 2027," said Sharma.

Transformation of customers' psychology

According to BeautyMatter, the highly competitive Chinese mid-year e-commerce shopping festival known as "618" showed strong and increasing signals.

According to Syntun Data, gross merchandise value of "618" in 2023 reached an astonishing 798.7 billion RMB, rising 14.7 percent year-over-year. Many market watchers interpret the result as a signal of rapid spending recovery in China.

Rational consumption has witnessed a notable surge, replacing impulsive buying behaviors, within the Chinese market. The growing middle-class consumers have shifted their priorities from mere price considerations to focusing on product quality and unique attributes.

The younger generation, particularly Gen Z, stands out as a remarkable consumer group. They possess a strong affinity for personalized and customized products, thereby creating significant opportunities for niche brands. Furthermore, they place immense value on self-expression and seek out social experiences through their consumption choices.

This move in consumer behavior, driven by rationality and a desire for personalization, has been reshaping Chinese market. Products and Brands that can effectively tap into these trends, offer unique experiences, and align their storytelling with the values and aspirations of consumers, especially the younger generation, are well-positioned to thrive in the future.