Recent figures from China’s National Bureau of Statistics has revealed that Chinese consumers spent a massive $750 billion in 2016 online. This represents more than both the United States of America and the United Kingdom combined. What is perhaps more interesting though is thanks to the Boston Consulting Group who have undertaken a study of both east and west ecommerce is how there are significant differences between the two markets.
It’s generally accepted that the west and the USA in particular were the original innovators in ecommerce, with companies such as Amazon disrupting the US market back in the 1990s. Thanks to the fact it has been established so long, ecommerce habits in the west and in the USA in particular have become deeply ingrained. In contrast, the growth of ecommerce in China came a little bit later and it also coincided with a general rise in disposable income. As a result of this, instead of a slow and steady growth of ecommerce over many years that occurred in such countries as the USA, in China the growth was fast-tracked, with Chinese ecommerce now pulling away ahead of the west.
Whilst in the west, internet shopping started off on desktop computers and laptops, transforming over time to more reliance on smartphones and tablets, the late development of the Chinese ecommerce market effectively skipped the desktop and laptop stage, going straight to smartphones. This has resulted in China becoming a pioneer and market leader in ecommerce, with reports estimating that in China, mobile purchases will account for nearly 75% of all online purchases by 2020 compared to 46% in the United States of America. Ecommerce as a whole is expected to grow at a rate of over 20% annually in China over the next few years. This is twice as fast as the growth that is expected to take place in the UK and the USA and will not just be fuelled by a growth in demand of existing ecommerce shoppers but by millions of new ones from more rural areas of China that are yet to go online.
It’s not just China however that is fuelling the rise in ecommerce growth however. India has been experiencing a growth in ecommerce thanks in part to the government’s push to move to a digital economy away from a cash economy. India has been the Asian exception, with consumers preferring to pay cash on delivery (COD) or by debit card, rather than on credit. However this is beginning to change with the government’s push according to recent figures released by the leading international accountancy firm KPMG.
“There has been an increase in use of credit cards, debit cards and e-wallets in the past one and a half years since the government announced the demonetisation move, a big push to curb black money in India,” says Rajat Wahi, head of consumer and retail at KPMG India.