The COVID-19 pandemic has made huge changes in global e-commerce for the past two years, and when we say huge — we mean REALLY HUGE. 

Statistics have shown that the global e-commerce market is expected to grow by 1.2 billion US dollars at the end of 2022, and China, being the world’s most populous country tops the market generating almost half of the global e-commerce market sales.

But how did China become today’s biggest e-commerce market in the world?

Presence of E-Commerce Marketplaces 

There are almost 1 billion internet users in China wherein 70% of them are big fans of online shopping. The country’s e-commerce market is composed of numerous competitors but is dominated by three companies such as Alibaba’s Taobao and Tmall, JD.com, and Pinduoduo.

Companies in the e-commerce industry have played an important role for the past two years as businesses and consumers had increased their usage of the internet for their online transactions. This helped China sustain and allow economic growth before and during the pandemic. 

Technological Advancement in Payment Systems

Chinese online shoppers are known to be mistrustful and don’t easily confide, especially when it comes to paying their hard-earned money for whatever they buy online. It was until digital and mobile payment applications such as Alipay and We Chat Pay have been made available inside the country. 

This step eased the process of paying online and has increased the confidence of Chinese consumers in whatever they buy on the internet, this then led to a drastic increase in the number of e-commerce transactions. 

A Diverse Market

Aside from being large, China’s e-commerce market is also packed with a diverse set of products, services, and brands; giving consumers a lot of options to choose from. Even though major Chinese cities like Shanghai, Shenzhen, Beijing, and Guangzhou are among the highest consumer cities, it is also unarguable that smaller cities also have a vital role in the growth of Chinese e-commerce. 

These small, less wealthy cities represent consumers who shifted from offline to online stores due to the limited access to physical retail stores within their cities.

These are just a few of the factors that contributed to the growth of the Chinese e-commerce industry; making China the biggest e-commerce market in the world.

But as they’ve said, there is no modern economy that can be truly said to be in a steady state; as China experienced having an unstable one for the past months and has not met certain expectations for the second quarter of 2022.

Challenges to Stability 

From the economic impact of the Russo-Ukrainian war to multiple COVID-19 outbreaks which disrupted various economic industries in the country, Chinese e-commerce was not an exemption. This industry, which propelled the economic growth of the country is also experiencing a decline in its market shares. Its effect shows in the recently held 618 Shopping Festival last month, where sales recorded a 10.3% increase; a much lower growth percentage compared to the figures generated from the past two years. With a mere deficit of 18-23%, the 2022 e-commerce event sales growth was deemed “The Slowest Ever.”

Looking for Opportunities to Revitalize the Market

Despite the economic slowdown made to the aforementioned issues, China can still look for ways to boost its economy and the e-commerce industry. 

One way to do this is by having its tech giants bring their operations to the international scene and show foreign investors that they have the potential to achieve growth despite the economic challenges and tougher regulations imposed by the Chinese government. This will allow e-commerce companies to expand and diversify their revenue base rather than only focusing on the Chinese market. 

Another way they could boost their economy is by looking for potential investors. With the COVID-related lockdowns loosening up, and the government getting better control over this problem, investors should be seeing a great opportunity to invest; as stock prices are relatively low when compared to their western counterparts. Investing might be a good or bad idea, but like they’ve always said — high risk, high reward.

China may have experienced a lot of economic downfalls this year, but one thing is for sure; they will do anything to put an end to things that hinder economic growth, and continue being part of the leaders in the global market.