­­What are the digital mega trends in China’s e-commerce?

These mega trends include the rise of smart cities and homes, and shifting market frontiers, among others. 

China has seen its digital landscape and e-commerce industry change with a high internet penetration rate and people coming online, giving rise to mega trends leaning toward enhanced customer experience and convenience.

According to FedEx Express’ white paper E-Commerce Mega Trends To Watch, mainland Chinese internet users reached 989 million as of December 2020, and the internet penetration rate reached 70.4%, citing data from the China Internet Network Information Center.

FedEx said customer experience has been redefined. Among the trends that arose include “smart cities and homes,” “connected consumers,” “experiential marketing,” and “reinvented shopping experience,” “making shopping no longer siloed as the blurring of lines between online and offline continue.”

“In markets like China, North America, and Europe where robust digital infrastructures and technology solutions are in an advanced stage, consumers look for elevated retail experiences through tech-rich offerings like the Cloud Shelf, and Augmented Reality (AR) mirrors in an offline store, or a virtual reality (VR) hotel tour, or livestreaming purchasing experience on mobile,” it said in a statement.

Businesses can also leverage on new technologies such as Near Field Communications, Artificial Intelligence, and bots to bring highly digitalised and personalised services to their customers.

In the logistics industry, players are working to provide customers with advanced analytics, it said, citing FedEx Surround which collates relevant data about packages to “provide businesses more visibility, predictive advisories and opportunities for proactive interventions.” 

Reaching the unreached is also highlighted as the trend “shifting market frontiers” gain ground. FedEx said conventional retailers and mom-and-pop stores are now connecting with customers through business-to-business e-commerce platforms. This comes as businesses had more opportunities to explore tier-2 cities and rural areas as many other areas had been developed.

“Benefiting from advanced digital and transportation infrastructure, together with the rising middle classes in tier-2 cities, China, APAC (Asia Pacific) and the Middle East are spearheading a revival in conventional retail and mom-and-pop stores through digital commerce. Competition in these untapped landscapes is likely to intensify in the years to come,” FedEx said.

Consumers are also cashing on convenience as the trends of “sharing economy “and “buying time” emerge because of the increasing urbanisation, digital infrastructure and changing attitude of consumers towards ownership.

FedEx noted that more than half of China’s population are expected to participate in sharing economy and buying time.

“Convenience is the underlining factor encouraging brands to cross-collaborate and innovate to meet consumers’ needs. From car-sharing and apartment renting to group-buying, consumers’ demand for shared services is fostering groundbreaking innovations,” it said.

“Among these, e-commerce has become a critical time-saver for consumers, providing fulfilment with just a click. At the same time, with consumers’ rising disposable incomes, demand for an on-demand serviced life is set to soar,” it added.