Rapid digitization and higher spending by consumers led to greater use of ecommerce services, leading to significant growth in the online retail market globally. The online retail market includes consumer-related products such as clothing and footwear, electricals, home products, food and grocery, and health and beauty.
The online retail market proved to be a tough competitor to the traditional retail segment through its customer-centric approach, which includes low pricing, a variety of payment gateways, and a plethora of options on products. The online retail market brought convenience, enabling consumers to purchase anything through a few clicks on their electronic devices from the comfort of their homes. Digital disruption through new technologies is expected to aid the growth of the online retail market.
The online retail market in China grew from $1,305.9 billion in 2020 to $1,587.8 billion in 2021, a growth of 21%. The market grew at a CAGR of 22.11% between 2018 and 2021. Despite the outbreak of the COVID-19 pandemic, China registered a 22.0% growth in 2021, mostly led by product categories such as food and grocery. The surge in online sales can be attributed to the closure of physical stores during lockdown, in addition to consumers’ fear of infection when out of the home. Most Chinese retailers have long boasted well-established e-commerce ecosystems, including strong supply chains and logistics, meaning they were able to meet the high levels of demand during periods of lockdown and after restrictions were eased.
Alibaba and JD.com dominate the online retail market in China through their strong brand value. They have significant strength in terms of logistics, and hold major brands can leverage their loyal customer bases to sail through the pandemic and beyond. Alibaba’s focus remains on developing capabilities spanning a range of product offerings such as ecommerce, retail, and technology. JD.com continues to be among the leading names in online electronic retailers.
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