Why the future of Chinese e-commerce is in its rural areas

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China announced a mere 6.7 percent economic growth in July 2018, the lowest growth rate since 2016. Despite a slowdown in overall economic growth, Chinese e-commerce has only increased, accounting for 40 percent of all worldwide e-commerce today, compared to a mere 20 percent of the global retail market just three years ago.

The fast-paced growth of the e-commerce sector in China can be seen through rapidly expanding companies such as Pinduoduo, which went through a $1.5 billion U.S. IPO in mid-July. However, why has e-commerce continued to grow despite an overall economic slowdown in conjunction with urban market saturation? The answer to this question lies in China’s rural areas, with its untouched older demographic, potential for infrastructure development and government-backed initiatives.

An untouched older demographic primed for growth

The older demographic of China’s population, typically living in the Western rural areas of China, presents immense growth potential for e-commerce retailers, with the 60+ demographic numbering 241 million, representing nearly 20 percent of China’s total population.

With comparatively newer exposure to technology compared to younger urbanites, this older generation presents an untouched income stream for e-commerce. Chinese retailers have only recently begun to recognize this fact to shape their marketing initiatives accordingly, with companies such as Alibaba introducing this year a Taobao shopping app specifically designed to cater to those 50 and older.

Posted by nearwow 437 days ago in Business  |  techcrunch.com

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