China's e-commerce space is dominated by alternative payment methods, such as mobile and digital wallets, surpassing cash and cards. According to GlobalData, these have become the most preferred payment method, with a 67.3 percent market share by 2023.
GlobalData's E-Commerce Analytics has predicted that the Chinese e-commerce market will grow 11.9 percent in 2024 as consumers shift from offline to online purchases, reaching CNY25.7 trillion by 2028.
Poornima Chinta, Senior Banking and Payments Analyst at GlobalData stated that the Chinese e-commerce market, which is the largest worldwide, has experienced sustained growth over the past years.
The reasons for this have been the increasing number of online shoppers, the availability of secure online payment systems, and rising internet and smartphone penetration.
The Chinese government has also taken several initiatives to boost e-commerce sales, such as introducing a three-year plan in August 2023 to develop and promote e-commerce even in rural areas.
Alipay and WeChat Pay are China's most popular alternative payment methods, with over one billion users worldwide. These methods have gained prominence due to their simplicity, speed, and convenience. International brands such as Samsung Pay and Apple Pay are also available.
Bank transfers and payment cards follow alternative payments. In 2023, cards accounted for a 14.9 percent share of the e-commerce transaction value.
Credit cards were preferred over debit cards due to their value-added benefits, including interest-free instalment payment options, reward programs, cashback, and discounts.
GlobalData predicts that the Chinese e-commerce market will continue to grow, supported by government initiatives and increasing consumer preference for online shopping.
Alternative payment solutions will likely remain dominant, driven by their growing user base and increasing online merchant acceptance.
