What: Coresight reviews the top trends that should shape up e-commerce in China in 2022.

Why it is important: Many players, many platforms, many levels of activities… it seems that the Chinese e-commerce market is significantly getting complex, which should increase the entry barriers for players trying to operate from abroad.

Coresight reviews the opportunities and constraints that will affect Chinese e-commerce in 2022, which represents $2.2 trillion in 2021, a year characterized by a strong resilience. They envision a very diverse online retail channels with a multiplicity of players and sub-channels, and recommend to look at the 10 following topics:

• Regulatory environment: this sets the whole context, as Coresight predicts that the recent moves in favour of a distributed richness will encourage sustainability, inclusion and social goods.
• Alternative retail: either in community group buying (in bulk) leading Alibaba to launch a new brand, Taocaicai, to address this demand, or in ‘recommerce’ or resale, which is gaining traction in the country and closely watched by Alibaba,
• Mini programmes: they are the perfect answer from tech giants to the recent government crackdown on “walled gardens” and the subsequent injunction to open up the platforms. It is simply a difference of scale and level in terms of branding power from these tech giants, who will still retain their capability to capture sales and profits, but through a different infrastructure,
• Livestreaming: even though it is already massive, Coresight predicts that it will consolidate its gains in 2022 and keep in growing both in value and in terms of e-commerce market share. Also, KOLs will remain at the centre of the brands’ strategies to leverage their livestreaming investments,
• Short-video content: livestreaming and video commerce will be a springboard for short video platform to increase their prominence in e-commerce. Coresight closely watches Douyin (the Chinese version of Tiktok) which launched a fashion-driven e-commerce platform called Douyin Bo, and Kwai/Kuaishou,
• Private traffic: it refers to brand-led online communication with customers via private groups, a method seen by brands to have greater control over communication and reduce third party costs. It also offers a highly personalized connection (being in terms of relationship to the brand or more simply in individualized perks and promotions) which means that it should be also scrutinized and highly favoured by brands,
• Rapid delivery: the ultra-fast delivery model is exploding in China, with JD.com investing in Dada group, an on-demand delivery platform, or Aoao Chifan (from ride-hailing provider Didi Chuxing) which is similar to Uber Eats. Ultra-fast delivery is believed to be both supporting and the consequence of the expected +14.3% in the online food market in 2022,
• Consumer to manufacturer model: in this model, retailers deply large volumes of customer data to create profiles, analyse characteristics and plan production (this is the Shein model). JD.com has partnered with Li&Fung in 2021 to deploy a multicategory collection of private label products leveraging the C2M model, with a design to shelf time reduced to 2 weeks.
• Luxury e-commerce: it is estimated that the travel restrictions helped the national luxury market to increase +21% in 2021, and a similar level of growth is expected in 2022, thanks to new habits taken by Chinese consumers, which should last even when borders reopen,
• Lower-tier cities will replace the saturated top-tier cities as reservoirs of growth and opportunities. This belief is supported by the excellent results shown by the platforms specifically addressing this type of cities.

2022 China E-Commerce Trends Opportunities Under Pressure