January 05, 2017
Beijing, 5th January 2017 — A global study of online payment methods by Worldpay, the global leader in payments, has discovered that the Chinese eCommerce is set to grow by 15% by 2020, cementing its position as the largest eCommerce market in the world. In 2016, e-wallets were the most popular payment method in China with an overwhelming 56% of eCommerce market share, followed by debit cards and credit cards both with just 11% of the market. The report also predicted that as China’s eCommerce market matures over the next five years, e-wallets are set to decline by 10 percentage points, as other payment methods start to increase in popularity amongst Chinese consumers.
Worldpay’s study concluded that, the total eCommerce market size of China is set to be worth a huge US$1,422bn by 2020 – almost twice that of the U.S. (US$779bn), more than nine times that of Japan (US$153bn), and closely equal to the eCommerce markets of U.S., Japan, U.K. (US$213bn), Canada (US$78bn), France (US$101bn), and Germany (US$105bn) combined.
These are the latest findings from Worldpay’s Global Payments Report 2016, which provides a useful snapshot of consumer payment preferences in 30 markets, as well as highlighting eCommerce trends over the next five years.
“The growth of the Chinese eCommerce market is hugely significant, and can be best exemplified by China’s recent shopping spree, the Singles’ Day, whose sales volumes achieved a new record,” said Tang Kok San, Country Manager for China, Global eCom at Worldpay. “The Chinese 13th Five-Year-Plan for eCommerce* is sending a clear message to the world, that China is boosting eCommerce development in the years to come, and reinvigorating economic growth. As this development gradually increases job opportunities, improves life quality, and grows the rural economy, merchants in China will need to work with an experienced payment partner to understand these trends and employ the right payment strategies to survive in a fierce market.”
Talking of the predicted decline in popularity of e-wallets amongst Chinese consumers, Tang Kok San said, “The Chinese eCommerce market is maturing, as local consumers starting to mirror the behaviour of western consumers, both in what they’re shopping for, and how they wish to pay. As eCommerce gradually penetrates different aspects of our day-to-day lives, we’re set to see a diversification in the range of payment methods merchants offer, to address these changing preferences. This could slightly dilute the huge market share e-wallets currently hold, but the most popular payment method will still rule in Chinese eCommerce by 2020.”
For the Chinese eCommerce market, Worldpay’s Global Payments Report 2016 also discovered:
These findings also prove that the Chinese eCommerce market is starting to mirror the behaviour of western consumers in the U.S., in that credit cards are set to overtake debit cards as the second-most preferred payment method after e-wallets by 2020. The long-held global assumptions about China’s “savings culture” will no longer reign when the “buy now, pay later” takes deeper roots among Chinese consumers.
From a global perspective, the Global Payments Report 2016 also predicted that India will overtake the U.S. to become the second largest eCommerce market in the world by 2034. And in terms of payment methods, e-wallets are expected to grow in market share by seven percentage points (28%), overtaking both credit and debit card market share in the US by 2020. In one of the most mature eCommerce markets in the world, the UK, debit cards are set to remain dominant, with only a one percentage point decline in market share to 40% by 2020. Conversely, in Hong Kong credit cards are set to decline by 11 percentage points to 43% of the overall market in 2020.
To capitalise on the opportunity raised by emerging payment methods, Tang Kok San offers some takeaways for merchants looking to expand outside of China:
For more information from the Global Payments Report, and to download a copy, visit: http://worldpay.globalpaymentsreport.com/chinese-registration/
About the 2016 Global Payments Report
The 2016 Global Payments Report was compiled using a combination of Worldpay’s data and insights, external findings from Euromonitor, Datamonitor and ystats.com, and secondary data from more than 100 independent sources. The forward-looking statements and figures contained in the report are indicative predictions based on Worldpay’s own data and experience and should be treated as such.
Worldpay is a leading payments company with global reach. We provide an extensive range of technology-led payment products and services to around 400,000 customers, enabling their businesses to grow and prosper. We manage the increasing complexity of the payments landscape for our customers, allowing them to accept the widest range of payment types around the world. Using our network and technology, we are able to process payments from geographies covering 99% of global GDP, across 146 countries and 126 currencies. We help our customers to accept more than 300 different payment types. For more information visit: http://www.worldpay.com/global
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