By Emma Lee
China’s booming e-commerce industry has experienced another year of steep growth in 2014. The transaction volume of the e-commerce market totaled 16.39 trillion RMB ($2.6 trillion USD) in 2014, surging 60% YOY, according to data released by the National Bureau of Statistics (NBS).
Rapid Growth of 2B (To Business) E-commerce
China’s e-commerce frenzy is encouraging domestic companies, big and small, to jump on board with 2B online shopping. The report revealed that the transaction volume of e-commerce targeted at enterprises soared 62.8% YOY to 12.75 trillion RMB in 2014, of which 12.25 trillion RMB is attributable to products and 0.50 trillion to services.
The e-commerce market for individual customers was worth 3.64 trillion RMB in 2014, up 48.6% YOY from the preceding year. Of the total amount, consumer goods account for 2.88 trillion RMB and services represent 0.76 trillion RMB.
Home-grown Platforms Dominate E-commerce Market
E-commerce platforms can be divided into three categories:
1) home-brew online marketplaces built and operated by companies themselves, like the sales and CRM platform of Sinopec Chemical Commercial Holding Co., Ltd.
2) third-party e-commerce sites, eg: Taobao.
3) e-commerce sites that run both in-house and other’s businesses, like JD, which has 70% of its revenue from self-owned businesses and 30% from third-party retailers.
The data show that 8.72 trillion RMB or 53% of the total volume was generated from businesses’ in-house online stores, and 7.01 trillion RMB or 43% from third-party e-commerce platforms. The transaction volume of mixed platforms hit 0.66 trillion RMB in 2014, rising 41.1% YOY.
Third-Party E-Commerce Sites Form Monopolies
Data on of third-party e-commerce platforms showed clear monopolies, with 90% of the total trade volume dominated by the top 20 e-commerce sites, including Taobao, Tmall and JD.
The widespread application of 4G networks and huge internet user base have been the major propellers for the swift development of e-commerce industry in China. Moreover, the nation’s economic slowdown in 2014 has pushed more enterprises to seek opportunities online in a bid to reduce costs in marketing, sales and production, according to Sun Qingguo, a representative from NBS.
The growth of e-commerce has triggered the fast development of related industries, like online payment and logistics. For example, China has delivered a total of 14 billion mail packages in 2014, up 51.9% YOY, overtaking the U.S. as the world’s largest country in terms of packages delivered. The bureau noted that it is the fourth year for China’s logistic industry to record a annual growth rate of over 50%.
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Source:: China’s E-commerce Transactions Surge 60% to $2.6 Trillion USD