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China’s e-commerce market still has ‘ample room’ for growth despite slowdown in retail sales, JPMorgan analyst says

  • China’s e-commerce sector achieved a 12 per cent overall growth in the March quarter, according to data from JPMorgan
  • Increased online penetration in various industries is expected to drive revenue growth for the e-commerce sector this year

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The upbeat forecast for China’s e-commerce market reflects the better-than-expected financial results of industry stalwarts Alibaba Group Holding and JD.com in the March quarter. Photo: Shutterstock
Ann Caoin Shanghai
China’s e-commerce market has the potential to further expand in the next few years amid improved penetration by internet platform operators into key sectors, despite a slowdown in retail sales, according to a senior JPMorgan analyst.
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“I feel relatively positive about the outlook for e-commerce growth over the next few years,” Alex Yao, co-head of Asia technology, media and telecommunications research at JPMorgan, said in an interview with the South China Morning Post on Thursday. “Even if offline retail [activity] remains moderate, online [sales] could see double-digit growth just by taking market share from [bricks-and-mortar stores].”

“There is ample room for [e-commerce platform operators] to take market share if they are able to continuously improve their value proposition to stakeholders, particularly consumers,” Yao said.

That upbeat forecast reflects the better-than-expected financial results of Chinese Big Tech companies in the March quarter, despite increased market competition, weak consumer confidence and trade uncertainties brought by geopolitical tensions.
Various Chinese e-commerce apps, promoting the Singles’ Day shopping festival in mainland China, seen on a smartphone screen. These include Tmall, JD.com, Pinduoduo, Taobao, Vipshop, Diantao, Douyin, Kuaishou, Suning and Taote. Photo: Shutterstock
Various Chinese e-commerce apps, promoting the Singles’ Day shopping festival in mainland China, seen on a smartphone screen. These include Tmall, JD.com, Pinduoduo, Taobao, Vipshop, Diantao, Douyin, Kuaishou, Suning and Taote. Photo: Shutterstock
This week, Alibaba Group Holding and Tencent Holdings both beat their quarterly earnings forecast, providing a positive indicator for domestic consumption in the world’s second-largest economy, which has the biggest number of internet users.
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