Ecommerce sales in China are on pace to surpass expectations yet again as they reach $1.53 trillion in 2018. Last year, ecommerce sales outpaced estimates by $44.41 billion, driven largely by sales from leader Alibaba’s Taobao and Tmall. Those two will still account for 58.2% of ecommerce sales this year, but Alibaba’s share is shrinking as the market diversifies with the emergence of specialty retailers and newcomer Pinduoduo’s recent success.
Between 2015 and 2019, Alibaba’s share of ecommerce sales in China will fall from 77.6% to 53.5%. Alibaba’s ecommerce sales are now growing slower than the overall ecommerce growth rate—34.3%—with Alibaba’s sales forecast to increase just 22.8%.
Alibaba reported that an increase in the number of users drove sales gains for 2017. Last year, the company added 87 million active mobile shoppers, bringing the total to 580 million users. During that time, consumer spending only moderately increased. New users typically have a lower average basket price than existing customers. Only after building trust and familiarity with Alibaba’s platforms do customers begin to spend on high-ticket items. What’s more, new consumers to Alibaba’s platform are also likely to be new internet users, and they typically browse, as well as spend on, other ecommerce platforms.