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China e-Commerce

  • Article
  • With muted growth at home, China’s e-commerce giants are heading overseas
  • We estimate China’s cross-border B2C e-commerce could reach USD500bn in value in 2025
  • The US and Western Europe offer growth opportunities, as well as South Korea, ASEAN and Latin America

China’s giants go global

Did you see the Superbowl? In 2024, this primetime slot for US advertising featured a commercial by Temu, the Chinese online retailer. It’s the latest sign of how China’s major e-commerce players are looking for opportunities in new markets overseas.

China is the global leader when it comes to e-commerce. Over 60% of its population of 1.4bn go online for their shopping, and 37% of retail spending is through e-commerce channels. However, this leaves limited room for further expansion at home, especially when the domestic economy is relatively muted – and so China’s e-commerce giants are venturing overseas in search of faster growth.

The overseas opportunities are large. We think China’s cross-border B2C (business to consumer) e-commerce could reach USD500bn in gross merchandise value (GMV) by the end of 2025. This is based on our analysis of goods bought online by overseas consumers from China’s e-commerce companies. For context, GMV was USD350bn in 2023 and just USD155bn in 2019, showing that fast growth is already underway.

China’s cross-border B2C e-commerce market in 2019 (iResearch estimate)
China’s cross-border B2C e-commerce market by the end of 2025 (HSBC forecast)

There are four major companies leading the way: Temu, Alibaba, Shein and TikTok.

  • Temu is the overseas arm of China’s Pinduoduo and has grown the quickest thanks to its ultra-low pricing of products ranging from clothes to children’s toys and active marketing efforts
  • Alibaba is a well-established company and already has a significant presence in the EU, ASEAN, South Korea and Latin America
  • Fast fashion retailer Shein has also grown rapidly and expanded into other product categories
  • Short-form video platform TikTok monetises its strong traffic from live-streaming e-commerce

Where are China’s e-commerce operators going? Our analysis suggests that the US and Western Europe are the most attractive locations, not just because they are large consumer markets, but also because there is still plenty of scope for e-commerce to grow. Online shopping accounts for 22% of retail spending in the US today, and 16% in Western Europe; compare this with 37% in China. South Korea, ASEAN, and Latin America are also likely to be attractive locations.

Geopolitics and regulations are the main challenges for these companies. We believe they face the highest risk in the US, especially given 2024 is an election year in the country. But there are challenges in the EU, too, and in ASEAN and Brazil, as governments attempt to protect local businesses. These are the risks that China’s e-commerce giants will need to navigate if they are to achieve their overseas ambitions.

Would you like to know more? Charlene discusses China’s online retailers in a recent edition of our Under The Banyan Tree podcast. Listen to the podcast*

You can follow Under the Banyan Tree – and its sister podcast, The Macro Brief – on Apple and Spotify, or wherever you get your podcasts, with new episodes released weekly.

To find out more about HSBC Global Research, please email us at askresearch@hsbc.com.

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