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According to McKinsey's latest survey of China's internet users, promising sources of e-commerce growth are emerging. The research points to areas with major growth potential: the uptake of online shopping among consumers in low-tier cities, e-commerce penetration beyond first-mover product categories such as apparel, purchases initiated from social media platforms, and the use of cross-border shopping to supplement domestic channels.
Our research also revealed positive trends in multichannel services, known in China as online-to-offline (O2O) services. Some observers have speculated that O2O services have used investment capital to cut their prices and thereby win customers. While this is true for some categories, our survey suggests customers appreciate the convenience and quality of O2O services - particularly travel, dining, and transportation, on which they increase their total spending after they start to use O2O options.
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