China Caught Up With the US on E-Commerce — Then Blew Past It

When it comes to e-commerce sales, no country even comes close to China.

According to a recent eMarketer report, online sales in China are expected to reach $1.935 trillion in 2019 — more than triple the projected $586.92 billion in sales for the U.S., the world’s No. 2 e-comm market. On its own, China represents more than half (54.7%) of worldwide internet sales. The figure is especially impressive given that the nation only overtook the U.S. as e-comm’s worldwide leader six years ago.

Chinese consumers are ahead of the rest of the world when it comes to shopping via their cell phones, both in terms of buying on mobile and in using mobile payment apps for online/in-store purchases. Four in five Chinese e-comm dollars (80%) are spent using a mobile device, compared to just 64.4% worldwide. Meanwhile, mobile payment apps are used by 81% of Chinese shoppers, while only 27% of Americans pay using this method.

eMarketer projects the worldwide e-commerce market to hit $3.535 trillion in 2019, a 20.7% rise over last year. Global infrastructure improvements could mean more cross-border e-comm, the report notes, with demand for luxury goods, including designer apparel, driving the trend in China.

It’s not just in China that e-comm spending is soaring; the rest of the Asia-Pacific region is shopping online more than ever, too. India and the Philippines both have seen 30%-plus increases in growth this year, with gains above 20% in China, Malaysia and Indonesia.

The ongoing strength in its e-commerce business is good news for China, which has been involved in a yearlong trade dispute with the U.S. This May, President Donald Trump ordered a tariff increase from 10% to 25% on $200 billion worth of Chinese imports — the third tranche of tariffs since the dispute ramped up last year — and also threatened to hike levies on another $300 billion worth of products. Beijing retaliated with duties of 5% to 25% on $60 billion in U.S. goods. A proposed 25% levy on the fourth tranche of tariffs, which would have impacted footwear, apparel and other accessories, was suspended at the end of June. But companies like Steve Madden, Walmart, Macy’s and JCPenney have all cautioned that new tariffs could hurt their business. Meanwhile, scores of footwear and apparel brands say they’re looking to move their production out of China and into alternative sourcing hot spots like Vietnam and Mexico, moves that could have negative implications for China’s economy.

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