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China’s e-commerce market still has ‘ample room’ for growth despite slowdown in retail sales, JPMorgan analyst says
- China’s e-commerce sector achieved a 12 per cent overall growth in the March quarter, according to data from JPMorgan
- Increased online penetration in various industries is expected to drive revenue growth for the e-commerce sector this year
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Ann Caoin Shanghai
China’s e-commerce market has the potential to further expand in the next few years amid improved penetration by internet platform operators into key sectors, despite a slowdown in retail sales, according to a senior JPMorgan analyst.
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“I feel relatively positive about the outlook for e-commerce growth over the next few years,” Alex Yao, co-head of Asia technology, media and telecommunications research at JPMorgan, said in an interview with the South China Morning Post on Thursday. “Even if offline retail [activity] remains moderate, online [sales] could see double-digit growth just by taking market share from [bricks-and-mortar stores].”
“There is ample room for [e-commerce platform operators] to take market share if they are able to continuously improve their value proposition to stakeholders, particularly consumers,” Yao said.
That upbeat forecast reflects the better-than-expected financial results of Chinese Big Tech companies in the March quarter, despite increased market competition, weak consumer confidence and trade uncertainties brought by geopolitical tensions.
This week, Alibaba Group Holding and Tencent Holdings both beat their quarterly earnings forecast, providing a positive indicator for domestic consumption in the world’s second-largest economy, which has the biggest number of internet users.
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