E-Commerce in China is in crisis in 2022

 After ten years of GDP growth, China e-Commerce economy has never experienced such a decline in economic performance as in 2022. The consequences of COVID are more serious than during previous crises such as SARS in 2003 or the global financial crisis of 2009. 

All sectors are affected: manufacture products, cosmetics, fashion, retail sales and exports.

In 2022, the whole world recorded a drop in retail sales, due to the health crisis and successive confinements, between 10% for Asia and the United States and 13% for Europe.

But China, the first affected, has all the assets to get back on its feet quickly. Already, its annual growth stands at 8.1% in 2021, the strongest recorded since 2012, and better than forecast at 6%.

Companies will take less than a year to recover from the health crisis in the Chinese market.

1. What are China's strengths? 
2. Why is multi-channel communication a plus? 
3. How does it materialize? 
4. What are the technological and regulatory challenges to be met?

Not all sectors have been affected in the same way. The retail sector lost $200 billion in China in 2020.

The advantage of e-commerce in Cina

E-commerce in China represents 700 billion euros in 2020, 500 million buyers. Half of the Chinese population uses e-commerce as a mode of consumption and, during the crisis, e-commerce platforms have grown by 82%.

In China, 650 million parcels are delivered every day via Alibaba compared to 6 million in the United States via Amazon.

In addition, payment by smartphone has become a habit for Chinese consumers who make more than 60% of online payments through this channel, i.e. 10 times more than in the United States according to 2016 figures from McKinsey & Company.

Wechat lists 1 billion active users for payment solutions, the first in the world. The main technologies are the QRcode, the NFC (Near-Field Communication = contactless) and the credit card emulator with the mobile.

The Chinese population is ultra-connected with the highest rate of household Internet and mobile services in the world.

Innovative approaches

Faced with this technophile public, brands are constantly innovating. Piaget, L'Oréal, Galeries Lafayette, LVMH or Givenchy are planning to invest in the development of e-commerce platforms, interactive 3D holographic windows, live streaming, mini-programs in the WeChat application or even virtual reality.

Indeed, brands adopt what is called a phygital strategy consisting in finding the right balance between physical signs and online presence. Stores have a new role as showrooms and are no longer the only place of purchase, now supplemented by e-commerce platforms, social networks and instant messaging.

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