A guide to the Chinese e-commerce and payment market

Everything you need to know about China’s 2 trillion $US local-payments market and its booming e-commerce sector

Countries China

China: an e-commerce & payments primer

If you are planning to enter the e-commerce market in China, payment methods should be one of your most important areas of optimisation. The Chinese market is dominated by what, in the West, are considered alternative payment methods. A merchant that doesn’t support the preferred and trusted local payment methods is unlikely to gain acceptance among Chinese consumers.

Wallets are the most popular type of online payment method in China, with 65% of market share for wallets [1]. Credit and debit cards come second, with a 18% market share, followed by bank transfers (10%).  Cash (4%) and various other minor payment methods (3%) make up the remainder [1]. Major international credit card providers have no purchase on the Chinese market. 100% of credit cards are issued by the local scheme UnionPay [1].

The people’s republic is the world’s largest e-commerce market, worth US$2.1 trillion [1]. Despite the headwinds of the recent pandemic and the still troubled global economic situation, the country is still the fastest growing of the world’s major markets. Its economy expanded by 8.1% in 2021 and is expected to grow by 4.4% in 2022 before rebounding to 5.1% in 2023 [2].

Chinese annual per capita income is just over US$11,000 and rising [1]. In some parts of the country, it’s already much higher. In Shanghai, for instance, the average worker earns over US$18,000 a year [3]. That’s significantly higher than the average salaries in some EU countries [4], a sign of just how prosperous many parts of China have become.To succeed in China’s fast-paced e-commerce market, you must know the preferred payment methods of China’s consumers and accept them at your checkout.

China’s e-commerce market

E-commerce in China is forecast to grow at an average rate of almost 11% a year until 2026 [1]. The average Chinese e-commerce shopper spends US$1,455 a year with online merchants [1]. In China, e-commerce accounts for a massive 33% of all retail sales [1]. The most popular online shopping category purchases are toys, hobby & DIY items (26%), fashion (25%) and food & personal care (21%) [1].

Although not yet able to rival America’s leadership in technology, China is the home to e-commerce giants, including the now globe-spanning JD.com, Tencent and Alibaba. Together, these platforms have over three billion users [5], [6], [7]. Their success has promoted e-commerce in China, helping to ensure that online buying is a widely accepted and trusted way to shop.

According to a recent study by EMarketer, more than half of all Chinese retail sales will be online by no later than 2024 [8]. The researchers point out that this level of e-commerce penetration is unique. In the UK, for instance, another high-penetration market, e-commerce sales are just 32% of all retail sales, in the US this figure is just 16% [1]. As an e-commerce opportunity, China is in a league of its own.

Things e-commerce providers need to know about China

The Sino-US trade dispute rumbles on. In June 2021, the Chinese parliament passed a law forbidding Chinese individuals and companies from complying with US sanctions [9]. Whatever impact this may be having in specialist sectors, such as semiconductors, it hasn’t done much to impede general trade.

With the exception of Washington’s two USMCA partners, Canada and Mexico, China is America’s number one trade partner by volume [10]. More importantly, for our purposes, cross-border e-commerce, much of it with the United States, grew by an estimated 20% in 2021 [11].

China also has strict rules that foreign companies setting up a business in the country must follow. In practice, most companies wishing to do business on the mainland will need to set up a joint venture with a Chinese partner.

82% of Chinese adults have a bank account and 22% have a credit card [1]. As noted above, however, all payment cards are issued by UnionPay. Western companies should not assume that they can use in China a payment infrastructure that relies on well-known global credit card brands.

Sixty-nine percent of Chinese consumers have an Internet connection and almost three quarters have an Internet-enabled smartphone [1]. That puts the Chinese online population at over twice the total US population.  This average, however, conceals some stark demographic differences. In urban areas, Internet penetration is 77% but in rural areas just 46% [12]. And this number is still growing. In 2020 alone, the country added 43 million first-time Internet users to its online population [13].


  1. Original PPRO research
  2. https://www.imf.org/en/Countries/CHN
  3. https://acadiaadvisory.com/shanghai-announced-average-monthly-salary
  4. https://data.worldbank.org/indicator/NY.GNP.PCAP.CD?locations=HR-BG-RO
  5. https://www.alibabagroup.com/en/about/overview
  6. https://corporate.jd.com/ourBusiness
  7. https://www.chinainternetwatch.com/31054/tencent-quarterly
  8. https://www.emarketer.com/content/global-historic-first-ecommerce-china-will-account-more-than-50-of-retail-sales
  9. https://www.ft.com/content/78883da1-ea26-45d6-9012-3c09d53aef42
  10. https://www.census.gov/foreign-trade/statistics/highlights/toppartners.html
  11. https://en.ndrc.gov.cn/netcoo/achievements/202201/t20220126_1313463.html
  12. https://www.chinainternetwatch.com/statistics/china-internet-users
  13. http://english.www.gov.cn/archive/statistics/202202/25/content_WS6218c1f2c6d09c94e48a57c5.html

Page index

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Quick facts

Chinese consumers love shopping during live streaming sales with 20% of shoppers buying directly during one of these events. However, as the Chinese state is starting to clamp down on live streaming it will be interesting to see how this affects this portion of retail.

China’s ecommerce is done primarily via the mobile. China has 1.6 bn mobile phone subscriptions. Chinese consumers expect to be able to communicate directly with brands when they need questions answered.

Despite formidable economic headwinds, China’s cross-border e-commerce sector was still growing at a rate of 15% a year according to official Chinese sources. The top five countries importing Chinese goods were the US, the UK, Australia, Canada and France.

General Information

  • Population 1,447.8 m
  • Population 15 + 1,192.3 m
  • Online population 991.7 m
  • Area 9,596,961 km2
  • Currency CNY
  • GDP 16,863.0 bn $US
  • GDP per capita 11,647 $US

Payment types

  • Card-based payments
  • Cash-based payments
  • Bank transfer
  • Wallets
  • Other
[{"label":"Card-based payments","value":"18"},{"label":"Cash-based payments","value":"4"},{"label":"Bank transfer","value":"10"},{"label":"Wallets","value":"65"},{"label":"Other","value":"3"}]

Banked population
  • China 82%
  • Asia Pacific 76%
  • World 67%
Credit card penetration
  • China 22%
  • Asia Pacific 29%
  • World 19%
Internet penetration
  • China 69%
  • Asia Pacific 61%
  • World 62%
Smartphone penetration
  • China 72%
  • Asia Pacific 62%
  • World 70%

The E-Commerce Market

Top e-commerce segments

  1. Toys, Hobby & DIY: 26%
  2. Fashion: 25%
  3. Food & Personal Care: 21%
  4. Electronics & Media: 17%
  5. Furniture & Appliances: 11%

Cross-border e-commerce

  1. Cross-border proportion of total e-commerce – 15%
  2. Value of cross-border e-commerce – 301.5 bn $US
  3. Online shoppers who have shopped cross-border – 39%

Top 3 cross-border shopping origin markets

  1. Japan: 21%
  2. South Korea: 14%
  3. USA: 13%
B2C e-commerce growth 2020->2021
  • China 11.3%
E-commerce % of total retail
  • China 33%
  • Asia Pacific 29%
  • World 20%
E-commerce completed on a mobile device
  • China 69%
  • Asia Pacific 65%
  • World 53%

E-Commerce Trends

  • E-commerce market size 2,059.5 bn $US
  • E-commerce spending per capita 1,455 $US
  • E-commerce spending as % of GDP 11.8%

The Credit Card Split

  • Local Schemes
[{"label":"Local Schemes","value":"100"}]

The information on our Insights pages has been compiled by us in cooperation with Datamatics and Wright & Brown. The data shown is partially owned by us and partially owned by GlobalData. © 2021 by PPRO Financial Ltd. No data and information can be used for any further publication without the explicit approval of PPRO.


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