E-commerce: where to find increments

招商证券(香港)Leo LIU

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　　Although pressured by macro economy weaknesses, consumptionwill still be the major GDP driver for the next few years (58.8%contribution in 2017), and online consumption will take the lead　　E-commerce increments are expected to come from customercoverage expansions and customer value exploitations　　BABA, JD, PDD and VIPS can co-exist in short to midterm, coveringdifferent segment of customers　　E-Commerce market size is expected to double in four years　　China is world’s largest e-commerce market with market size measured byonline retail sales value totalled RMB7.2tn in 2017, growing at a CAGR of41% during 2012-2017. Such growing trend is expected to continue and themarket size is expected to reach RMB14.5tn in 2021E with a CAGR of 19%,according to Frost & Sullivan. With the highest e-commerce penetration ofover 20%, China’s e-commerce market is still growing much faster than otherregions, with future increments mainly coming from customer coverageexpansions (Page 6) and customer value exploitations (Page 14)