What's up on China e-commerce?

Currently 53% of China population are online.
-> This internet penetration rate is low compared to other countries. This means there is potential for growth.

Internet peneration by country:
UAE 99%
Japan 93%
UK 92%
France 88%
US 88%
Singapore 82%
Malaysia 71%
China 53%

Out of the 53% of China population who went online, only 38% of population are shopping online.
-> People who went online but do not shop online may do so in future.

Potential of rural China:
72% of urban population are web users. But only 28% of rural population are web users.
-> Getting rural people to go online is a big driver of e-commerce.

Weak retail in infrastructure  and low availability of certain products outside tier 1 & 2 cities.
-> Due to few shopping malls in tier 3 & 4 cities, consumer prefer to shop online.

• Per capital retail floor space in USA is 2.6m sq
• Per capital retail floor space in Japan is 1.3m sq
• Per capital retail floor space in China is 0.6m sq
-> China has a low capital retail floor space.

• Rising disposable income increases affordability of online shopping

• Most retailers offer products at significant discounts

• Low car ownership (11%) in China. Hence shopping online is more convenient compared to shopping offline where consumer has to bring items back home via public transport.


Stocks that are key beneficiary of China ecommerce are Alibaba and JD.com.