Transactions on China’s e-commerce sites have increased from 8.1 trillion yuan (US$1.23 trillion) to 26.1 trillion yuan (US$3.97 trillion) over the last five years with an average annual growth rate of 34% according to data released by MOFCOM.
The number of online shoppers has increased from 240 million to nearly 500 million, and online retail trade has increased from 1.3 trillion yuan (US$197.6 billion) to nearly 5.2 trillion yuan (US$790.3 billion), representing an average yearly increase of 40%. Over the same period, employment driven by e-commerce, both direct and indirect, increased from 15 million people to 37 million.
MOFCOM has said that the explosive growth of China’s e-commerce sector has derived primarily from the increase of competitiveness in the country’s internal market.
Today, e-commerce enterprises no longer compete on the basis of goods, price, and speed, but rather on the basis of integration, product ecology, innovation, and big data. E-commerce companies have gradually moved into the offline commerce arena even as major physical retailers develop robust online operations.
Alibaba Group has invested more than 100 billion yuan (US$15.2 billion) in traditional industries, and JD.com has plans to open more than 10,000 physical stores.
At the same time, major e-commerce players are working to develop a whole platform ecology including transactions, payment, logistics, and full-lifecycle support for consumers. Consumers have welcomed innovations including virtual reality, augmented reality, live e-commerce, and social media e-commerce.
MOFCOM believes that the core power of China’s e-commerce industry lies in its innovation both in technology and business models, and this innovation has become their most unique ability.