CHINESE E-COMMERCE is set to grow by 15 per cent by 2020, cementing its position as the biggest e-commerce market worldwide, according to a report issued by Worldpay, a leading payments company with global reach.
E-wallets were the most popular payment method in China in 2016 with an overwhelming 56 per cent of market share, followed by debit cards and credit cards, both with 11 per cent of the payments market, the London-listed Worldpay said.
Cash on delivery held an 8 per cent market share, with bank transfers taking the remaining 7 per cent of the market in 2016.
The report predicted that as the e-commerce market in China matures over the next five years, e-wallets are set to decline by 10 percentage points to a 46 per cent market share as other payment methods start to increase in popularity among Chinese consumers.
“The growth of the Chinese e-commerce market is highly significant and can be best exemplified by China’s recent shopping spree, the Double 11, in which sales volumes achieved a record,” said Tang Kok San, manager in charge of Worldpay’s business in China.
Tang added the Chinese e-commerce market is maturing, as local consumers started to mirror the behaviour of Western consumers, both in what they were shopping for and how they wished to pay.
“This could slightly dilute the huge market share e-wallets currently hold, but the most popular payment method will still rule in Chinese e-commerce in 2020,” Tang added.
As e-commerce gradually penetrates different aspects of people’s day-to-day lives, people are set to see a diversification in the range of payment methods merchants offer to address these changing preferences, the report found.
Credit cards are expected to go up slightly from 11 per cent to 14 per cent and debit cards should also increase from 11 per cent to 13 per cent by 2020. However, e-wallets are still likely to be king in 2020, the report added.
The report also showed the total e-commerce market size of China is set to be worth US$1.42 trillion (Bt50.7 trillion) by 2020, almost twice that of the US at $779 billion and more than nine times that of Japan at $153 billion. It also predicted that India will overtake the US to become the second largest e-commerce market in the world by 2034.