E-Commerce: China's Online Retail Sales Hit US $736.7 billion in H1
2020 Q2 Marked Chinese Economy Recovery from Covid-19,
and E-Commerce Purchases Have been Confirmed as Its Major Driver
Chinese e-commerce continues its upcoming momentum. According to Bloomberg, China’s economy will return to grow by 2.5% this year. In more details, the Chinese economy is expected to see a 5.5% increase this quarter from a year earlier and a 6% increase in the final three months of 2020, Bloomberg reported quoting a report from the bank’s chief China economist Wang Tao and others. According to experts, China’s economy regained its vitality in the second quarter, which marks an important milestone in the global struggle to recover from the shutdowns due to the pandemic outbreak, the report said.
Chinese shoppers are pushing online retail to new heights. According to the Ministry of Commerce (MOC) latest report, China’s online retail sales reached about US$736.7 billion in the first half of 2020, up 7.3% year on year. Definitely a great performance in the post pandemic era.
“E-commerce has shown strong vitality and resilience, and has played an important role in fighting COVID-19, ensuring the supply of materials, assisting in the resumption of work, and promoting the replenishment of consumption”, said MOC spokesperson Gao Feng, at a press conference last Thursday.
The growth rate of online retail sales increased for four consecutive months, with this June seeing year-on-year growth of 18.6 percent, said Gao, adding that e-commerce continued to be an anchor stabilizing the consumption market, with its scale expanding and its role becoming more prominent.
During the country’s coronavirus lockdown, consumers got used to ordering ingredients online for their families, something that a lot of people had never tried before. That’s why the number of e-commerce users in China rose by 100 million compared with last year, and the number of stores on major online retail platforms went up 3.8% year on year, the MOC data showed.
The Chinese government is currently of expediting domestic consumption via measures such as “E-commerce Festivals” (电商节), as well as the issuance of consumption vouchers via fintech platforms such as Alipay. For example, Alibaba and JD.com handled record sales of $136 billion during 618 Shopping Festival, the country’s midyear biggest online shopping gala and one of the most significant barometers yet of how much Chinese consumers are spending as the world’s second largest economy slowly recovers from the coronavirus pandemic. “Chinese and foreign brands had sluggish sales due to the pandemic, and 6.18 has become their most important opportunity in the first half,” JD Retail Chief Executive Officer Xu Lei said in an interview with Bloomberg Television. For discretionary items like home appliances, “we’ve seen a recovery in consumption.”
MOC said that the second “Dual Product Online Purchase Festival” (双品网购节) held from 28 April to 10 May drove over 430 billion yuan in nationwide online retail sales during the period, while online retail sales of physical goods rose by 33.3% YoY.
According to MOC multiple regions throughout China are working with e-commerce platforms to expedite consumption via methods such as voucher issuance, to “effectively drive online consumption and restore market expectations.”