In less than a decade, China has emerged as the world leader in e-commerce. It claims more online shoppers than any other nation. The numbers speak for themselves.
China is home to 730 million Internet users, it accounts for 40% of global retail e-commerce, and its mobile payment market is a whopping 11 times the size of the U.S. market.
“Whether we’re talking about transactions, technology, or money, China really stands out,” said McKinsey senior partner Jonathan Woetzel Tuesday at Fortune’s Brainstorm Tech International Conference in Guangzhou, China.
And this is only the beginning for China’s astronomical growth in the e-commerce space, Wortzel said. For one, China is still in the early days of the country’s middle-class boom. In other words, more than 300 million middle-class consumers with rising disposable incomes are propelling the consumption of China.
Zhang Xuhao is one Chinese entrepreneur who is taking advantage of this emerging trend. Xuhao is the CEO of Ele.me, China’s leading food delivery startup, which is valued at approximately $6 billion and counts Alibaba and Tencent among its investors.
“In China, more and more people don’t want to go out,” Xuhao said at the conference. “There are traffic jams, there are parking fees, so I think it’s a very reliable way for people to get food.”
Ele.me holds 55% of market share in the country, while its main competitor, Meituan Waimai comes in second with 41%. Here’s where it gets complicated: Alibaba was one of the original backers of Meituan before offloading its assets to focus on Ele.me.
“As you expand in China, relationships become very complicated,” Xuhao said. “Sometimes [our rivals] are our friends, and sometimes they are our enemies. The competition is so fierce.”
The company is one of China’s darling unicorns, with more than 260 million users in 2,000 cities across the country. Now, Xuhao says he’s focused on expanding the company’s retail categories, working with Alibaba to deliver goods straight from the platform, and entering more cities. “If you’re a winner in China, that means you can be a winner in the world,” he said, alluding to his global ambitions.
Woetzel said foreign business leaders need to pay close attention to e-commerce giants that are rapidly dominating the Chinese market. “The main thing people under-appreciate is how big a change you have to make in order to be successful in the digital world of China,” he said. “The growth is higher, the stakes are higher, and the competition is much more intense.”