WeChat Pay has revolutionised how Chinese customers shop online by going beyond social media chat to provide a full suite of purchasing and payment services to its more than 1 billion users, says GlobalData.

The research company reports that alternative payments – like apps and digital wallets – account for almost 72 per cent of e-commerce payments in Mainland China with cash now used for just a few per cent. 

The Chinese e-commerce market is anticipated to grow by 10.5 per cent this year to reach US$2.3 trillion and is projected to rise at a compound annual growth rate (CAGR) of 8.7 per cent to reach US$3.2 trillion in 2026 as customers transition from offline to online.

“The Chinese e-commerce payments landscape is dominated by alternative payment solutions, with Alibaba’s Alipay and Tencent’s WeChat Pay being the most popular among consumers,” said Ravi Sharma, banking and payments lead analyst at GlobalData.

Debit, credit, and charge cards made up 14.1 per cent of the total value of e-commerce transactions this year. Due to consumers’ increasing preference for electronic payments, cash’s market share has been steadily declining for online purchases.

The data analyst company also said rising internet and smartphone penetration and increasing consumer confidence in online shopping are among the reasons that led to the change. 

In addition, China’s e-commerce activities were also spurred by the Covid-19 outbreak, as more and more customers opted to shop online to avoid coming into contact with actual money and POS machines.

GlobalData also predicted the Malaysian e-commerce market will expand by 19.9 per cent this year, reaching US$9.2 billion in value.