Last week, Mary Meeker dropped her Internet Trends 2018 online. The report is an indispensable look at the trends shaping the digital economy today. Perhaps of most interest to the readers here are the trends juxtaposing the U.S. and China e-commerce markets.
Online innovation, especially in retail, is increasingly becoming a two-horse race. Companies from the U.S. and China dominate the landscape. E-commerce is a larger portion of the retail market in China, but U.S. companies like Amazon and Walmart have an easier time expanding their operations abroad.
Here are a few of the important trends happening in e-commerce today.
The U.S. saw a sharp decline in growth from 2011 to 2013, but the e-commerce market has grown since then and last year surpassed $400 billion.
Amazon controls 28 percent of the U.S. e-commerce market, which is worth $129 billion.
E-commerce in China is almost a way of life, and it’s one that is primarily dominated by two firms: Alibaba and Tencent. Their mobile payment platforms have enabled a new ecosystem of online shopping to emerge and has made paying with smartphones more common than in any other country. Alibaba’s AliPay has 54 percent of the mobile payments market in China whereas Tencent’s WeChat Pay has 38 percent.
In 2013, China passed the U.S. in e-commerce as a percentage of total retail sales. In 2017, e-commerce had 13 percent of sales in the U.S. whereas it’s above 20 percent for China.
Globally, digital transactions of all kinds are growing and now represent about 60 percent of payments, according to a survey of consumers in 16 countries. Digital transactions include mobile payments using QR codes and other contactless technologies (NFC) and online shopping.
How companies reach and sell to consumers is changing. By some metrics, China looks like the place to see what the future of retail looks like. However, China is a very particular type of market. Retail giants like Amazon and Walmart are adapting to e-commerce in the U.S. and other markets in different ways. Walmart’s Flipkart acquisition is one example of this. While Alibaba and Tencent have solidified their market positions by taking over both offline and online mobile payments, Amazon and Walmart have relied more on mixing brick-and-mortar locations they own with online platforms.
The differences in retail and social media platforms in each country is also changing how entrepreneurs adapt to each market. While China has long been a smartphone-first company when it comes to e-commerce, some people in the U.S. are now learning the advantages of building brands almost entirely through their smartphones.
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