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China Leads the World in Ecommerce – China’s Ecommerce Imports to SA

According to GlobalData’s Ecommerce Analytics, China is set to achieve a 9.9% growth and retain its dominant position in the global ecommerce landscape in the current year. This would mean that the Chinese ecommerce market will reach CNY 15.2 tn ($2.2 tn) in 2023, driven by the ongoing shift of consumer preferences from offline to online shopping. The study found that ecommerce sales in China grew at a CAGR of 11.2% between 2018 and 2022 to reach a value of CNY13.8 tn ($2.0 tn) in 2022. China accounted for 33.9% share in the global ecommerce market in terms of payments value in 2022. It was followed by the US with $1.8 tn, while the UK stood at a distant third with $ 287.4 bn. The report believes that the global ecommerce landscape is unlikely to change in 2023 with China expected to retain its position at the top. The growth in the ecommerce market is also supported by increased activity in rural areas. According to the China’s Ministry of Commerce, online retail sales in rural areas rose by 12.5% during the first half 2023 compared to the same period in 2022.

The report also highlights livestream shopping as a growing trend in the China. Livestream shopping allows customers to view and buy products via online video streams hosted on ecommerce platforms. In addition, it notes the increase in popularity of social commerce due to the popularity of messaging platforms such as WeChat.

Meanwhile, that SA’s DTIC signed a MoU with China: ”Strengthening Investment Cooperation in Digital Industrialisation” during the recent BRICS Summit.(Can someone please define “digital industrialisation”?). The MoU does not dwell on ecommerce (except to say that competition policy should be used in the regulation of digital markets, and that the 2 countries should “carry out exchanges on their … regulations, rules and standards”).  This comes at a time when, as reported in our previous Newsletter, the textile workers union with the textile manufacturers association launched a complaint at the DTIC against Shien and some other Chinese ecommerce companies for failing to pay the correct customs duties when importing fashion garments into SA. The Minister has told the press that an investigation has taken place, but at the time of writing the results have not been published, however, without warning SARS has started to slap heavy customs duties on Shien imports, which has annoyed consumers considerably. Unfortunately, this got heavy social media coverage for the wrong reason and has undermined consumers’ trust in ecommerce.

Meanwhile, a combined raid by SARS, the DTIC, the CCSA and other government agencies uncovered almost R20m in illegally imported Chinese textiles this month stored in one warehouse. EFSA is reliably informed that this is the tip of the iceberg, but that government is reluctant to repeat the raid, arguing that bringing multiple agencies together is a costly procedure. There is no direct evidence to link these textiles with any ecommerce company, however, it does reinforce the argument that Chinese textiles have been undermining the recovery of SA’s textile industry. EFA wonders if this pattern of illegal importation of textiles from China is to be found elsewhere in Africa?

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Alastair Tempest

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