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Chinese online traders are becoming global giants

From 2010 to 2018, JD.com even grew its sales by 65 per cent per year. The former purely stationary electronics trader also sells power tools and home improvement material for example.

From 2010 to 2018, JD.com even grew its sales by 65 per cent per year. The former purely stationary electronics trader also sells power tools and home improvement material for example.

Six megatrends which are boosting the development of Chinese companies as global trade giants have been identified by the consulting company Bearing Point and IIHD, the institute for international trade and distribution management. These trends are:

  1. Economies of scale by the companies through a swift rise in production capacities
  2. Highly efficient banking and finance system as well as high liquidity and low interest rates promote companies' investment confidence
  3. Rapidly advancing urbanisation leads to an increase in the country's and its population's prosperity and establishes the largest sales market in the world
  4. High level of education boosts the development of the country as a country of technology and at the same time initiates rising income and higher private consumer spending
  5. High intensity of (mobile) Internet usage - more than 71 per cent of the overall 802 million active Internet users make use of online payment services and e-commerce offers, which makes China by far the largest e-commerce market in the world
  6. Changing consumer behaviour is increasingly aligning with the lifestyle of western industrial countries

These megatrends are not least helping China to achieve above-average e-commerce growth. These sales grew annually in the years 2016 to 2018 by 31.3 per cent to USD 1.5 bn. Average growth rates of 22.1 per cent per year are also forecast for the years until 2021. Thus, China has developed into the world's largest e-commerce market by far.

The main players in the Chinese e-commerce market are thus achieving above-average growth rates. In the period from 2010 to 2018, Alibaba grew on average by 57 per cent per year, the former purely stationary electronics trader JD.com even grew by 65 per cent. The third online giant is Tencent.

|26 August 2019


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