China's e-commerce continues to grow because of its rural areas untouched demography, the potential for infrastructure development and government-backed initiatives. The country's e-commerce continuously grows despite the slowdown in its overall economic growth.
Records show that China's economic growth is at a low rate of 6.7 percent as of July 2018. It is the lowest recorded growth rate of the country since 2016.
Despite the country's slow-moving economy, its e-commerce rapidly increased which accounted for 40 percent of the global e-commerce. Three years ago, China's e-commerce is at 20 percent in the global retail market.
The rapidly expanding Chinese companies show the country's fast-growing e-commerce sector. Pinduoduo reached a $1.5 billion U.S. IPO in mid-July.
China's rural areas boosted its e-commerce industry. China's Western rural areas showed immense growth possibilities for the e-commerce retailing industry because of its large population that reaches about 241 million which represents nearly 20 percent of the country's total population.
Older generation urban people in the country present an untouched income stream for the e-commerce industry because they have newer exposure to technology when compared to younger urbanites. The idea of marketing in the older generation urbanites was lately recognized by retailers shaping their marketing initiatives. Recently, Taobao developed a shopping made specially to cater to those that are 50 and above. It is, however, needed to educate users especially the elders to fully adapt to this initiative.
The country's e-commerce industry is not yet at its full potential because it lacks technological development in its rural areas. According to an estimate, the users in the western rural areas of China are approximately 27 percent of all internet users in the whole country. The increasing number of users in the areas is an effect of the vast majority of e-commerce infrastructures developed on its Eastern seaboard.
Currently, e-commerce retailers are having a difficulty in doing business in the regions because of the lack of cellular infrastructure developments and the poor logistics network in these places. It is difficult for users to place their orders and also it is difficult for retailers to deliver their goods.
China's Civil Aviation Administration approved JD.Com's proposal to test a drone delivery network in the northwest Shaanxi Province. The test's result is expected to resolve the delivery issue in those areas.
China is also looking forward to its countryside's growth which may provide opportunities for e-commerce businesses to flourish. China's National Strategic Plan for Rural Vitalization from 2018 to 2022 gives hope that rural incomes and living standards will increase.
