China has already surpassed the USA as the world’s largest eGrocery market. According to CLSA Head of Asia Telecom & Internet, Elinor Leung it is likely to widen its lead with US$1.4tn sales by 2021. E-grocery and rural will be new drivers while the rebound in consumption and product premiumisation will continue to fuel growth.
The China Internet sector rallied 24% YTD, outperforming the MSCI China by 10% and contributing the majority of MSCI performance. According to Elinor, given its large weighting at over 30%. Internet will likely continue to deliver stellar performance as fundamentals are strong with revenue and profit growing c.30% in 17CL. China e-commerce could exceed market estimates and China online sales already surprised with an accelerated 31% YoY growth in 1Q17. We expect China e-commerce to sustain c.20% Cagr and e-commerce could reach 20% of retail sales by 2020.
E-grocery and rural will be new drivers while the rebound in consumption and product premiumisation will continue to fuel growth. China has already surpassed USA as the world’s largest grocery market and will likely widen its lead with US$1.4tn sales by 2021. Alibaba is China’s largest shopping mall and JD is China’s largest retailer, we believe they are the ultimate winners.
Other online segments are also doing well especially tourism, advertising and gaming.
Elinor Leung joined CLSA’s telecoms and internet team in 2002 and was promoted to her current role in 2009. Prior to that, she worked for private equity fund CDP Capital. Elinor is a CFA charterholder and a certified public accountant. She holds an MBA and an MEng (Mech) degree from Cornell University and a BEng (Mech) degree from the University of Hong Kong.