- Mainland China continues to see high usage of mobile services like e-commerce. Key drivers of this trend include strong internet connectivity, high smartphone penetration rates, rising usage of 5G and the Covid-19 pandemic.
- The e-commerce market, however, is saturated and highly competitive, pushing some players like Eachnet out of business. Similar observations can be made for Hong Kong, China.
Overview Of Mainland China’s e-Commerce Market
Online retail is booming all across the world, especially as countries shift their focus towards digitalising the economy. Mainland China is no exception and it is the largest e-commerce market globally, generating about 50% of the world’s transactions. Our Consumer and Retail analysts note that e-Commerce is the fastest growing portion of the retail sector in China, with the number of people online far outweighing any other market in the world.
A key driver of this trend is the strong internet connectivity and smartphone penetration rates in the country. The Chinese consumer is extremely mobile-centric, with the number of mobile Internet users in China reaching 1.03bn at the end of 2021, up by 42.98mn year-on-year (y-o-y). The proportion of China’s netizens accessing the Internet via their mobile phones amounted to 99.7%, according to the China Internet Network Information Centre.
China’s cyber capacity has also been growing. In 2021, China built the world’s largest fibre-optic and mobile broadband network as the country continues to focus on 5G to drive economic growth. China’s 14th Five-Year Plan (2021-2025) released in March 2021, for instance, highlighted the importance of the ICT sector to the country’s overall growth. Technologies such as 5G, Internet of Things (IoT) and cloud computing continue to be emphasised for investment and development, with the government aiming to achieve 5G penetration of 56% by 2025. At Fitch Solutions, we believe that the strong push to expand 5G networks will cement China’s position as the largest and most advanced 5G market in Asia and the world. As such, by the end of our forecast period in 2031, we anticipate mobile subscriptions to reach 1.72bn, with 5G the only wireless technology in use by then.