Market Trends of China Ecommerce Logistics Industry
Cross border eCommerce driving the growth of the market
- China’s e-tailing (online retailing) across borders, mainly in consumer goods, is expected to continue to grow in 2024, resulting in a more balanced revenue mix for the country’s leading cross-border online retailers, consumer goods manufacturers, and logistics operators.
- Supported by supportive policies, relative pricing competitiveness, and overseas logistics capabilities, the growth momentum will be supported by external demand headwinds.
- The government has put measures in place to support the industry, such as encouraging local companies to construct overseas warehouses and establishing cross-border eCommerce pilot zones in most Tier 4 and above cities to facilitate imports and exports of goods.
- With the expansion of overseas warehouses, Chinese retailers are able to ship more bulk goods, position inventory geographically closer to customers and deliver goods more quickly and cheaply to overseas customers.
- The export value of cross-border E-tailing in China continued to increase, with a 69% year-on-year (YoY) growth in Q1 of 23 compared to the overall goods export growth of 8.4%. However, the real volume could be higher, as the statistics do not take into account transactions outside the pilot zones or smaller platforms.
- Major cross-country e-tail platforms that are owned by internet giants such as Alipay, PDD Holdings, ByteDance, and Sea Limited are expected to benefit from the growing sales through their own websites and apps.
- A few independent e-tailers that have their own distribution channels, including Banggood (B2C), Shein (B2C), and Lintin (Lintin) Holding Co., Ltd. (LTC), could also regain the traction that they had in the past few years.
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Growth in Retail e-commerce sales is driving the growth of the market
- According to the National Bureau of Statistics of the People's Republic of China, consumer goods sales in the country increased significantly in September 2023.
- Total retail sales in China in September 2023 reached RMB 3,922.6 billion (USD 551.57 billion), up 5.5% from the same month last year. The increase in consumer goods was more significant in the non-auto sectors, growing by 5.9%.
- In the period January to September, the total retail sales amounted to RMB 34,210.7 billion (USD 4811.24 billion). This represents an increase of 6.8%. Urban and rural areas both saw an increase in retail sales, with urban sales rising by 6.7% and rural sales rising by 7.4%, respectively. These numbers show that the Chinese consumer market is stable, reflecting the strength of the Chinese economy and consumer confidence.
- In particular, the increase in rural areas shows that the market base is growing, opening up new opportunities for global tech companies.
- The increase in non-auto retail sales suggests a change in consumer preferences. This shift may be driven by technological innovation and lifestyle changes. This shift gives tech companies the opportunity to innovate in the consumer goods space by combining technology with consumer products.
