Chinese shoppers are celebrating the online shopping extravaganza Singles Day, and by 1:30pm local time, they had spent nearly $6 billion on Alibaba, the country’s biggest e-commerce site. Last year it took them the full day to cough up that much cash. It is a sign of just how quickly China’s e-commerce market is growing.
But Singles Day is just the beginning. Chinese e-commerce is about to get much, much bigger. By 2018 sales from e-commerce in China will exceed those in the rest of the world combined, reckons Morgan Stanley.
At the rate e-commerce is growing, it will account for one in every five renminbi spent in China by 2018.
One of the factors that helps drive rising e-commerce sales is consumer confidence. The more experience people have with online shopping, the more they spend.
Another reason is that physical retail infrastructure in China is thin on the ground, especially when compared to more developed economies.
This is particularly true outside of big urban centers, which helps explain why much of the growth will come from smaller towns. Nearly 60% of active mobile devices are in “tier 3” or smaller cities, and a quarter of online purchases in the first half of this year were made on mobile.