China’s E-Commerce Market Landscape

China remains the world’s largest e-commerce market, with revenues from online retail projected to exceed USD 2 trillion in 2025 and a long-term growth forecast of nearly 9 per cent CAGR through 2034. Online retail of physical goods accounted for about 26.5 per cent of total retail sales in 2024, equal to RMB 12.79 trillion, while total e-commerce transactions reached RMB 46.4 trillion.

This dominance stems from a vast consumer base, high smartphone penetration, and strong government support for digital infrastructure, logistics, and cashless payments. Consumers are mobile-first, with growth accelerating in lower-tier cities.

The platform ecosystem is diverse. Alibaba’s Taobao and Tmall remain leaders, JD.com excels in logistics and electronics with GMV around RMB 4.5 trillion in 2024, while Pinduoduo thrives on discount and group-buying models. Xiaohongshu, Douyin, and WeChat mini-programs capture lifestyle and social commerce niches.

E-commerce is equally strong in B2B, valued at USD 1.26 trillion in 2023, while B2C reached USD 583 billion. Electronics, fashion, cosmetics, and food dominate consumer demand, while B2B trade is centered on industrial supplies, healthcare, and electronics. Cross-border commerce is shifting too, with B2C expanding quickly thanks to platforms like Tmall Global and JD Worldwide.

Challenges remain: complex supply chains and logistics for B2B, and intense competition with high customer acquisition costs in B2C. On the tax front, e-commerce firms are generally subject to a 25 per cent corporate income tax, with preferential rates for high-tech and smaller enterprises. VAT applies to platform operators, while cross-border purchases under RMB 5,000 benefit from composite preferential tax rates.

Government incentives continue to support the sector, from favorable VAT and customs policies to free trade zone pilots. Major platforms such as Alibaba, JD.com, and Pinduoduo operate not only as market leaders but also as strategic partners in national programs promoting rural digitalization and cross-border trade.