The 132nd China Import and Export Fair, also known as the Canton Fair, opened online on October 15. Starting from this session, the Canton Fair will extend the service time of its online platform, with a record number of products on display.
COVID-19-related restraints and geopolitical issues have severely disrupted global supply chains, resulting in e-commerce playing an increasingly important role in global trade. And in e-commerce, China is leading the world. E-commerce transactions have increased from $3.61 trillion in 2016 to $5.85 trillion in 2021, and is expected to reach $5.94 trillion for 2022.
Growth in Internet usage, significant infrastructure construction, the maturing of the online payments culture, and substantial expansion and improvement in the logistics sector that delivers goods directly to consumers have also helped the e-commerce sector expand significantly in China. Moreover, spectacular success and growth of some e-commerce giants such as Taobao, JD.com and Pinduoduo have made online shopping an important and necessary part of people's lives.
Like other segments of the Chinese economy, e-commerce has also been supported by government policies, technology development and consumer demand pattern changes.
The central government has provided support for construction of 132 comprehensive cross-border e-commerce pilot zones covering 30 provinces, ushering in a new phase of all-round development, with links running from eastern to western parts of China, and vice-versa. Meanwhile, local governments are actively responding to the initiatives of the central government. For example, China's Guangzhou city government has arranged a special fund of 50 million yuan ($6.92 million) every year to e-commerce companies for supporting local cross-border e-commerce businesses.
In the future, China will continuously improve its 5G network infrastructure and develop technologies such as cloud computing, artificial intelligence (AI), blockchain, and others, which will further accelerate e-commerce growth. An increasing number of Chinese companies are upgrading digitalization of their supply chains to improve operational efficiency and enhance competitive advantages in the global market.
As Internet usage grows, preference for more user-centric e-commerce business models will also grow, especially for the Z-generation (born after 1997). That is why live streaming e-commerce, social e-commerce, and community e-commerce have started gaining traction on the back of various consumer needs. ByteDance-owned short video app Douyin e-commerce uses live streaming extensively and its turnover exceeded $100.67 billion in 2021. It has become popular in overseas markets also, especially in Europe, the U.S., and Southeast Asia.
China has continued to transform and upgrade its manufacturing industry since the early 1980s when reforms began. It gradually transformed from traditional manufacturing to smart manufacturing as technologies became more efficient and more talents became available. Today China has a world-leading, large-scale comprehensive supply chain network, integrating upstream and downstream components to ensure high quality. Along the way, Chinese cross-border e-commerce companies also leverage the advanced supply chain system to help develop competency in flexible manufacturing, diverse product lines, and excellent product quality to ensure global competitiveness.
For example, China's cross-border e-commerce platform Shein has overtaken international fast fashion giants with its cutting-edge digital system and flexible supply chain model. In 2021, Shein's revenue exceeded $15.7 billion. Internet giant Alibaba leverages its own digital advantages and actively promotes the construction of logistics facilities, continuously exploring and improving the cross-border payment system to provide global consumers with a better shopping experience. Currently, Alibaba's global logistics services offer 5-day delivery in 20 top cities of the world. It is saving 20 percent in overall supply chain costs while maintaining global efficiency standards.
The development of several global industrial chains heavily relies on secured and stable supply chains in China. As its digital economy grows, China will continue to leverage its supply chain advantages to sharpen its global competitiveness in e-commerce and other digital fields, playing an important role in stabilizing the global supply chains.
The development of China's e-commerce is reshaping global markets, creating a more inclusive environment, which provides more opportunities for small and medium-sized enterprises, brings more job opportunities, and actively promotes trade globalization.
China remains committed to reform and opening-up, and to its "dual circulation" development pattern (domestic supply and demand loop in conjunction with external trade), and will continue to leverage its advantages in digitalization and supply chain management to promote the development of the global e-commerce market. This would help maintain a diversified and stable international economic regime and trade relations among countries across the world.
In the post-epidemic era, rising customer acquisition costs have forced brands to accelerate digitization and establish long-term relationships with customers. As technology evolves, e-commerce business models will naturally become more customer-centric.
Meanwhile, emergence of new disruptive technologies such as blockchain, big data, AI, and others will boost efficiency in many aspects, including operation of supply chains, the speed of transactions, user experiences in cross-border payments, cross-border logistics and cross-border after-sales service, facilitating globalization of trade. More innovations can be expected.
Going forward, global companies should work together with different stakeholders, including governments, industry associations and other industry players, to address issues emerging along the way, such as cross-border payments, data security and others, to further improve industry standards and their better development.