Chinese consumers alone make more than a third of the purchases on the world’s retail sites. While China remains the largest retail ecommerce market, ironically its relative success in containing the novel coronavirus kept its 2020 e-retail growth below that of the U.S., where the raging pandemic closed many physical stores for months.

Consumers in Asia are the world’s most avid online shoppers. But big U.S. ecommerce players, including Inc., are encountering headwinds as they seek to enter these booming markets from powerful domestic rivals and protectionist government policies.

Asian consumers in 2020 purchased a hefty $2.525 trillion worth of goods on retail websites and multi-merchant marketplaces, an increase of 19.2% from $2.118 trillion in 2019, according to Digital Commerce 360 estimates. China, which accounts for more than 59% of the region’s online retail sales, registered a growth of 14.5% to $1.495 trillion in sales from $1.306 trillion a year earlier.


While Asia accounted for 59.1% of global online retail sales in 2020, that was down from 61.3% a year earlier, Digital Commerce 360 says. That’s a result of China and several other major Asian nations containing the COVID-19 pandemic more quickly than did many Western nations, where physical stores remained closed or operated with reduced capacity for much of the year. In the U.S., for example, pandemic-related store closures and consumer fear of venturing into stores led to a 44% increase in online retail sales in 2020, according to Digital Commerce 360.


Nonetheless, retail ecommerce sales still grew faster than physical store sales in Asia in 2020, leading ecommerce penetration of retail revenue in the region to tick up to 23.8% in 2020 from 19.0% in 2019, according to Digital Commerce 360.

China is the largest ecommerce market in Asia

China accounted for 59.2% of Asian online retail sales in 2020, down from 61.7% the year before. The world’s second-largest economy, meanwhile, represented 34.9% of global e-retail sales, a decrease from 37.8% in 2019.

China lost market share because its economy largely shut down for the first quarter of 2020 as the country dealt with the coronavirus outbreak that began in Wuhan, the capital of China’s Hubei province. Even though China’s economy rebounded in the second half of the year as it brought the coronavirus largely under control, total retail sales for 2020 declined 3.9%, while online sales increased a modest—by China’s standards—14.5%.

Despite that relatively low growth, the rise in online purchasing increased the ecommerce portion of China’s retail sales to 27.7% in 2020 from 22.9% in 2019.



China is the world’s largest online retail market, with consumers purchasing more than twice as much in dollar terms than their counterparts in the United States, the No. 2 market. It’s a concentrated market, with Alibaba Group Holdings Ltd.’s two giant marketplaces—Taobao and Tmall—along with rival Inc. accounting for more than 80% of online purchases.

Alibaba’s top-dog position is helped by the massive adoption of Alipay, a PayPal-like payment service that Alibaba created initially to reassure Chinese shoppers that their payments would be safe. Today, more than 900 million Chinese consumers use Alipay, mostly via a mobile app, and it’s accepted by some 80 million Chinese businesses, including offline businesses like utilities and many small brick-and-mortar shops.


Alibaba ultimately spun off AliPay into Ant Group, which then evolved into a major lender and the operator of China’s largest mutual fund. Ant had planned to go public in November 2020 at a valuation of more than $300 billion, but that IPO was halted by the Chinese government, which is clamping down on the financial service that increasingly competes with China’s big banks.

The dominance of Alibaba and led Inc. to curtail its online efforts in China in 2019, turning into a portal selling imported goods and giving up on its efforts to sell Chinese goods to Chinese consumers. Walmart Inc., the world’s largest overall retailer by revenue, adapted in a different way, by buying a more than 10% stake in and making that website its online sales channel.

Meanwhile, new competitors keep popping up in China. They include Pinduoduo, which has grown rapidly by offering rock-bottom prices. The publicly traded company said it attracted 643 million consumers to its marketplace in the third quarter of 2020, increasing GMV 73% to $214.7 billion.


Another hot online retailer is Xiaohongshu, also known as Little Red Book or RED, whose customers are mostly young Chinese women. The company’s customers can ask questions about fashion and cosmetics and get replies, along with information about how to buy them.

Coupang, South Korea’s Amazon, keeps Amazon at bay

Strong domestic marketplace operators also represent obstacles in two of the world’s 20 largest economies where Amazon is not competing—South Korea and Indonesia.

In South Korea, market leader Coupang keeps offering faster and faster delivery, much as Amazon has been doing in its key markets. Coupang introduced in 2019 the “Rocket Wow” membership program—similar to Amazon Prime—that promises goods will arrive by 7 a.m. the day after they’re ordered.

Coupang announced in February 2021 plans to go public on the New York Stock Exchange in an IPO that could value the company at around $50 billion. Coupang said in its filing that its 2020 revenue nearly doubled to $12 billion.


But just as Pinduoduo has been challenging Taobao on price, in South Korea the WeMakePrice marketplace has become increasingly aggressive in appealing to value-conscious shoppers, claiming to offer the lowest prices online on most goods on its platform.

The Gmarket marketplace, owned by eBay Inc., is a major competitor in South Korea. But eBay has been reported to be looking to sell that South Korean business unit as it continues a process of selling valuable assets, like StubHub, as it seeks to maximize the value of its businesses for eBay shareholders.

The online retail leader in Indonesia and all of Southeast Asia is Lazada, majority-owned by Alibaba, which has invested another $2 billion into the company since taking control in 2016.


Alibaba also invested $1.10 billion in 2018 in Lazada competitor Tokopedia, which later raised money from Alphabet Inc.’s Google and Temasek Holdings Ltd., the investment firm owned by the government of Singapore. In all, Tokopedia has raised $2.80 billion, according to Crunchbase. Tokopedia reportedly is planning to merge with ride-hailing app Gojek, setting the stage for the combined company to go public.

Ecommerce in India: competition heats up

Amazon is a major player in Japan where it goes head-to-head with local rival Rakuten Ichiba. Together, they account for more than 60% of online retail sales in the country.

The big battleground in Asia is India, where online retail sales are dominated by Flipkart, which is owned by Walmart, and Amazon, which has invested at least $6 billion in India. However, the government limits foreign companies from selling their own inventory to Indian consumers, limiting them to operating marketplaces where local merchants sell to Indian shoppers.

While Amazon and Walmart have invested in local companies as a way to circumvent those restrictions, in early 2021 there were published reports that the Indian government would crack down on such deals as it seeks to protect the livelihood of the 70 million small shopkeepers in India who dominate retailing in the country.


Just as hundreds of millions of Chinese consumers use the mobile Alipay app to pay for all kinds of purchases, Flipkart’s PhonePE has become the leading mobile payment service in India. PhonePE was partly spun off by Flipkart in December 2020 when it raised $700 million, putting the value of the payment service itself at $5.5 billion.

Flipkart still owns 87% of PhonePE. And that stake is one reason why Flipkart is likely to command a stock market value of around $40 billion if, as some anticipate, it goes public in 2021.

Alibaba’s Taobao and Tmall are Nos. 1 and 2 in the Digital Commerce 360 Top 100 Online Marketplaces, a ranking of global multi-merchant shopping sites by total value of goods sold, also referred to as gross merchandise value, or GMV. Amazon is No. 3;, No. 4; eBay, No. 5; Rakuten Ichiba, No. 7; PT Tokopedia, No. 8; Walmart, No. 10; Coupang, No. 12; Lazada, No. 13; and Flipkart, No. 16.

This article was updated on Feb. 17, 2021. The archived article can be found here.