The Chinese e-commerce and payment market

China’s massive e-commerce market is a world beater — and it’s still growing

Countries China

Intro China

China is a massive and increasingly prosperous market. For an e-commerce provider that understands the local market and has a relevant product offering, the country is highly lucrative.

The people’s republic is the world’s largest e-commerce market, worth US$1.7 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$10,000 and rising [3]. 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 [4]. That’s significantly higher than the average salaries in some EU countries [5], 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 worth US$2,111.7 billion and is forecast to grow at an average rate of 12% a year until 2025 [1]. The average Chinese e-commerce shopper spends US$1,500 a year with online merchants [1]. In China, e-commerce accounts for a massive 45% of all retail sales [1]. The most popular online shopping category purchases are health and beauty (22%), toys and hobbies (22%) and food (17%) [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, Tencent and Alibaba. Together, these platforms have over three billion users [6], [7], [8]. 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 [9]. 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 30% of all retail sales, in the US this figure is just 14% [1]. As an e-commerce opportunity, China is in a league of its own.

Payment methods in China

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.

E-wallets are the most popular type of online payment method in China, with 72% of market share for e-wallets [1]. Credit and debit cards come second, with a 12% market share, followed by bank transfers (5%).  Cash (3%) and various other minor payment methods (8%) make up the remainder [1]. Major international credit card providers have no purchase on the Chinese market. 100% of credit cards are issued by local schemes [1].

Enabling and limiting factors

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 [10]. 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 [11]. More importantly, for our purposes, cross-border e-commerce, much of it with the United States [19], grew by an estimated 20% in 2021 [12].

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.

80% of Chinese adults have a bank account and 21% have a credit card [1]. As noted above, however, all payment cards are issued by local schemes. Western companies should not assume that they can use in China a payment infrastructure that relies on well-known global credit card brands.

Sixty-five 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% [13]. And this number is still growing. In 2020 alone, the country added 43 million first-time Internet users to its online population [14].


  1. Original PPRO research

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Quick facts

The Chinese economy is staggering under the real estate crisis and the continuing Covid lockdowns. The IMF has revised Chinese growth downwards to their lowest point in 40 years of 3.3% with concerns that the Chinese slowdown will have potentially major global effects.

Despite economic jitters, the Chinese e-commerce sector is expected to grow in 2022 by 10.4% as consumers increasingly prefer to shop online rather than offline.

With a travel ban in place, Chinese consumers who have been unable to buy Western goods in person have taken to cross border shopping instead. Tmall Global, one of the biggest and most popular cross border marketplace, saw an increase in YOY growth of nearly 70% amongst consumers aged 21 and under.

The most popular e-commerce website in China is Taobao with an estimated monthly visit number of 300m.

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 USD
  • GDP per Capita 11,647 USD

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 71%
  • World 67%
Credit card penetration
  • China 22%
  • Asia Pacific 13%
  • World 19%
Internet penetration
  • China 69%
  • Asia Pacific 60%
  • World 62%
Smartphone penetration
  • China 72%
  • Asia Pacific 71%
  • 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 – 13.9%
  2. Value of cross-border e-commerce – 301.5 bn USD
  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 23.8%
  • World 20%
E-commerce completed on a mobile device
  • China 69%
  • Asia Pacific 59%
  • World 53%

E-Commerce Trends

  • E-commerce market size 2,059.5 bn USD
  • E-Commerce spending per capita 1,455 USD
  • 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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