E-commerce in China is set to grow by 15 percent by 2020, cementing its position as the biggest e-commerce market worldwide, according to a report issued by Worldpay, a leading payments company with global reach.
E-wallets were the most popular payment method in China in 2016 with an overwhelming 56 percent of market share, followed by debit cards and credit cards, both with 11 percent of the payments market, the London-listed Worldpay said on Thursday.
Cash on delivery also held 8 percent of market share, with bank transfers taking the remaining 7 percent of market share in 2016.
The report predicted that as the e-commerce market in China matures over the next five years, e-wallets are set to decline by 10 percentage points to a 46 percent market share as other payment methods start to increase in popularity among Chinese consumers.
The growth of the Chinese e-commerce market is highly significant and can be best exemplified by China's recent shopping spree, the Double 11, in which sales volumes achieved a record, said Tang Kok San, manager in charge of Worldpay's business in China.
Tang added the Chinese e-commerce market is maturing, as local consumers started to mirror the behavior of western consumers, both in what they were shopping for and how they wished to pay.
This could slightly dilute the huge market share e-wallets currently hold, but the most popular payment method will still rule in Chinese e-commerce in 2020, Tang added.
As e-commerce gradually penetrates different aspects of people's day-to-day lives, people are set to see a diversification in the range of payment methods merchants offer to address these changing preferences, the report found.
Credit cards are expected to go up slightly from 11 percent to 14 percent and debit cards should also increase from 11 percent to 13 percent by 2020. However, e-wallets are still likely to be king in 2020, the report added.
The report also showed the total e-commerce market size of China is set to be worth $1.42 trillion by 2020, almost twice that of the US at $779 billion and more than nine times that of Japan at $153 billion.
It also predicted that India will overtake the US to become the second largest e-commerce market in the world by 2034.