This is the third article in short three-piece series called “Why China?” This piece explores China’s growing love affair with shopping.
Every country has their own national pastime. As football is to Brazil, bullfighting is to Spain and cricket is to India, retail therapy is overwhelmingly the national pastime of China. Here are five things that you should know about retail in China and what’s fueling the country’s shopping addiction.
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1. The world’s largest e-commerce market is in China
China continues to dominate worldwide with its e-commerce fever, and this is only expected to grow at an exponential rate. According to a 2017 Goldman Sachs report, over 460 million Chinese shoppers made up this sector in 2016, resulting in over US $750 billion worth of sales. By 2020, a Forrester Report forecasts that China’s online retail market will reach $1.1 trillion, which is 9x larger than Japan and 17x larger than South Korea.
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2. The majority of Chinese shopping is done on mobile
While 49% of global consumers are partial to paying on mobile, 80% of Chinese consumers prefer this mode of purchasing. According to a 2017 PwC report, 52% of Chinese consumers shop online on a daily or weekly basis. Chinese e-commerce giants continue to battle for mobile sales, with apps Taobao, JD and VIP.com wooing consumers with almost instantaneous purchasing and same to next-day delivery.
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3. China’s biggest online shopping festival broke global records in 2017
11.11, better known as Singles’ Day, started as an anti-Valentine’s Day. It has since grown to be the single most famous online shopping event for retail in China, with sales that outnumber popular western shopping festivals Black Friday and Cyber Monday combined. Alibaba broke its own record in 2017 within a mere 24 hours with $25.3 billion in sales compared to $17.8 billion in 2016.
4. Cash isn’t king
Mobile payments, comprised mostly through WeChat and Alipay, dominate the online shopping experience in China. A staggering $1.48 billion worth of mobile payments were made in 2017 through Alipay. Thanks to the implementation of QR codes that link directly to each customer’s bank account, the process is made even more convenient for the local consumer. This enables instantaneous payment both online and offline through use of mobile apps.
5. Chinese men outspend women online
Men in China are spending more than their female counterparts, according to a 2018 survey by Unionpay, China’s national bankcard association. Approximately 23% of male consumers are reported to spend more than $777 compared to 15% of female consumers. This is the first time that the survey, which is conducted annually, has reported male spending to exceed the amount of that made by females. The drive for this spend? Online gaming and food delivery.
China’s shopping fever continues to grow at an exponential pace, but this is only the tip of the iceberg. Understanding Chinese shopping holidays, China’s consumer market and the impact of key opinion leaders (KOLs) are essential when breaking into retail in China.
