E-commerce: Sales Getting Back to Normal

27/04/2020

China’s cross-border e-commerce businesses contributing 5% of PRC’s overall foreign trade growth. Ministry of Commerce: “Livestreaming become a driving force in  e-commerce sector. 4 million online sales promotion shows were livestreamed”

 

As people around the world are blocked from leaving their homes, consumers are moving online to do their shopping. Not only in China where e-commerce is  a daily life constant, but everywhere around the world. And now China’s online retail sector returned to business as usual in March, with livestreaming e-commerce driving the trend and online sales of physical goods growing faster than in the same period last year, the Ministry of Commerce said at a press briefing on Thursday.

According to ministry spokesman Gao Feng, several major e-commerce platforms such as Alibaba and JD.com reported total online retail sales growth of around 10% year-on-year in March. Data from the National Bureau of Statistics have shown how online retail sales slipped by 0.8% to around $31.08 million. The figure is 2.2 percentage points lower than the decrease that occurred during the first two months of the year.

 

As we adjust to life with the new coronavirus around us, our behaviours and habits are quickly changing. By the way, Chinese e-commerce hit hard by novel coronavirus outbreak.

 

Alibaba was the first to appoint the negative growth in its China retail and local services businesses during the current quarter, but JD and Pinduoduo had same difficulties too. Despite the overall decline in online purchases in the first quarter, sales of physical goods such as daily necessities, food and medicine grew from the same period last year. Online retail sales of physical goods increased by 5.9% year-on-year, accounting for 23.6% of the total retail market.

Agricultural products did particularly well as the Covid-19 pandemic kept many people away from brick-and-mortar food markets. In the first three months, online retail sales of agriculture products surged by 31% year-on-year to about 93.7 billion yuan. Fresh food in particular, including meat, eggs and vegetables, stood out — with online sales up more than 70% year-on-year, the ministry said.

 

Luxury E-Commerce Platforms - xiaohongshu - china - cifnews

 

Both Alibaba and JD described robust growth in orders for groceries and other essentials compared with the same holiday period last year. JD said that orders for food products on its platform grew 154% compared with a similar period following last Chinese New Year (which follows the lunar calendar), with rice and wheat products selling a respective 5.4 and 4.7 times more.

All e-commerce platforms reported “fairly rapid growth” in these categories, Freshippo, the company said, saw increases in orders but also had difficulty making deliveries because of staffing issues. Online sales of household necessities, kitchenware and fitness equipment grew by a combined 40% year-on-year in the first quarter. Online sales of automobiles, furniture, clothing and shoes shrank over the same period.

 

Moreover, livestreaming has grown to become a driving force in China’s e-commerce sector.

 

From a personal trainer who livestreamed her daily workout to the Shanghai Fashion Week and the Strawberry Music Festival, among other events, livestreaming has become one of the major trends of 2020. And companies are seeking business too. Livestreaming e-commerce has also grown as many physical retail shops have remained closed for months. According to data, more than 4 million online sales promotion shows were livestreamed in the first quarter, the ministry said. 

China’s e-commerce market continues to see high double-digit growth year on year and Chinese leadership already underlined e-commerce contribution for country’s GDP, that’s why  even Chinese President Xi Jinpining underlined how “e-commerce is an emerging business with great potential”. Beijing fully supports e-commerce. 

Retail sales at China’s cross-border e-commerce businesses recorded a 38.3% increase and reached US$26.4 billion in 2019, contributing 5% of PRC’s overall foreign trade growth last year, according to data from the General Administration of Customs. Thus, the fast growth of cross-border e-commerce in recent years has become a new highlight in the country’s foreign trade, that’s why on April 8th, Chinese Premier Li Keqiang announced China is going to build 46 new integrated pilot zones for cross-border e-commerce around the country to help revive its pandemic-hit foreign trade. 

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