Distinguished guest Dr. Farrukh Piash, Doctoral degree from Zhejiang Gongshang University, CEO of Hangzhou Haifu Technology

Good afternoon ladies and gentlemen, distinguished guests.

It is my pleasure to be here to share my thoughts and opinions on hottest global trends in 2023.

For most of 2022, global markets were battered by inflationary pressures, covid-19 and the threat of a potential recession. So, what will happen in 2023? If you want to rebalance your portfolio or expand it, you should check out the top investing trends for 2023.

Overview of big picture--Opportunities and threats

Preparing for a post-pandemic era---Aim at slow but steady recovery

The focus on technological solutions, such as remote working, e-commerce, and online payments, has strengthened. The implications of this trend are far-reaching and will likely shape the future of work.

1. Reduced resource price
2. Increased unemployed rate
3. Increased global travel need
4. Government incentives to stimulate purchase
5. Increased competition of business

Electric vehicles

The electric vehicle market industry is projected to grow from USD206.42 billion in 2022 to USD 957.06 billion by 2030, exhibiting a compound annual growth rate of 24.5% during the forecast period (2022-2030). The market size was valued at USD 165.8 billion in 2021. The increasing prices of conventional fuel and attractive incentives being offered by the government on producing and purchasing EV industry are the key drivers enhancing the EV market growth.

Electric Vehicle Market Trends

Increasing investment in electric cars to boost the market growth

The increasing investment in the mobility space is considered a driving force for the growth of the electric cars market players such as Ford, Daimler AG, and Groupe Renault are majorly investing in their plans to produce. For instance, Ford declared its plan to invest USD 300 million to create a new light commercial vehicle in 2023 at its plant in Romania. Key companies such as Daimler AG and Mercedes Benz invest heavily in producing EVs. Therefore, the market is anticipated to experience long-term growth during the forecast period.

Further, with the growing environmental concerns, governments and environmental agencies across the world are enacting stringent emission norms and laws to reduce emissions. Major regulatory measures are stringent emissions targets for the reduction of nitrogen oxides and carbon dioxide in the air. High amounts of greenhouse gasses are emitted from vehicles, and federal and state governments in the US are stepping up efforts to make transportation cleaner.

Additionally, governments are offering attractive incentives and policies to encourage EV sales. It provides customers with multiple benefits, such as decreased selling prices, zero or low registration fees, and the free charging infrastructure of EVs at multiple charging stations. Therefore, such initiatives by the government have enhanced the EV industry CAGR across the globe over the forecast period.

However, several governments across the globe import tax, exempt road tax, and purchase tax based on various subsidies. These subsidies have also encouraged automobile manufacturers to increase their EV production. Moreover, the government has also invested in infrastructure construction and formulated favorable policies. for instance, the US government plans to invest USD 287 billion in highway developments over the next five years. Additionally, the government shall also be developing EV charging stations across the US to support the development of these countries, driving the growth of the market revenue.

EV sales rose by 55% in 2022, reaching a total of 10.5 million, according to the EV Volumes sales database. These figures include both battery electric vehicles (BEVs) and plug-in hybrids (PHEVs).

Sales of new EVs in China increased by 82% in 2022 compared to the year before. The country accounted for 59% of global EV sales last year, cementing its position as the world’s largest electric vehicles market. China is also the world’s biggest EV producer, with 64% of global volume.  

China’s EV market is highly competitive, with over 94 brands offering more than 300 models at prices ranging from just $5,000 to over $90,000. Local brands take up 81% of the EV market, with BYD, Wuling, Chery, Changan, and GAC among the top players. Meanwhile, a range of EV start-ups, such as Nio, Xpeng, Neta, AITO, IM Motors, Zeeker, Aiways, and Livan, are performing well and giving strong competition to established foreign brands.

In 2022, Tesla faced challenges in the Chinese market, with production halts in April and May caused by the resurgence of COVID-19, leading to a nearly 5% YoY drop in its market share. BYD, on the other hand, increased its market share by over 11% YoY in 2022, with six out of the top 10 models in the Chinese market coming from the brand.

The top 10 EV models in 2022 represented nearly 45% of all EV sales, a 3% decline from 2021. This indicates that established players are facing fierce competition from fresh start-ups. Additionally, the Wuling Hongguang Mini EV’s eight-quarter dominance in the market came to an end in Q4 2022 when the BYD Song overtook it as the best-selling EV model.

China’s EV market remains the most vibrant globally, with a wide range of brands and models available to consumers. As the industry continues to evolve, it will be interesting to see how established players and new entrants navigate the challenges and opportunities in this fast-growing market.

Metaverse

The metaverse is the emerging 3-D-enabled digital space that uses virtual reality, augmented reality, and other advanced internet and semiconductor technology to allow people to have lifelike personal and business experiences online.

private capital is betting big money on the metaverse. In 2021, metaverse-related companies reportedly raised more than $10 billion, more than twice what they did in 2020. And so far in 2022, more than $120 billion has flowed into the metaverse. The latest McKinsey research shows that the metaverse has the potential to generate up to $5 trillion in value by 2030. It’s an opportunity that is too big to ignore.

The metaverse means different things to different people. Some believe it’s a digital playground for friends. Others think it has the potential to be a commercial space for companies and customers.

We believe both interpretations are correct. In June 2022, McKinsey released Value creation in the metaverse, a new report based on surveys of more than 3,400 consumers and executives, as well as interviews with 13 senior leaders and metaverse experts. Based on this analysis, we believe the metaverse is best characterized as an evolution of today’s internet—something we are deeply immersed in, rather than something we primarily look at. It represents a convergence of digital technology to combine and extend the reach and use of cryptocurrency, artificial intelligence (AI), augmented reality (AR) and virtual reality (VR), spatial computing, and more. And the “enterprise metaverse” may coalesce in a way that unlocks even more opportunity, beyond simply serving as a virtual place where people interact.

At its most basic, the metaverse will have three features:

• a sense of immersion
• real-time interactivity
• user agency

And ultimately, the full vision of the metaverse will include the following:

• platforms and devices that work seamlessly with each other
• the possibility for thousands of people to interact simultaneously
• use cases well beyond gaming

The metaverse isn’t about escaping reality, says futurist Cathy Hackl. Instead, it’s about “embracing and augmenting it with virtual content and experiences that can make things more fulfilling and make us feel more connected to our loved ones, more productive at work, and happier.” For Brian Solis, Salesforce’s global innovation evangelist, “what the metaverse is really all about is community. The value of belonging to this community. The role you can play as a user in this community so that you feel like a stakeholder and not a ‘user.’”

How will people experience the metaverse?

The pandemic fueled an increase in the acceptance of virtual interactions, and the metaverse is geared to connect physical and virtual worlds via commerce. The emerging metaverse in fashion and retail is where brands are already launching stores, games, and digital events.

The future metaverse will likely be much broader. “I believe absolutely that the advent of graphics-based computing and 3-D environments is going to change many of the technologies, standards, conventions, and monetization models,” says Ball. And that impact could be lasting. “It’s going to have profound generational change. Most importantly, it’s going to reach many of the categories we’ve long hoped would be altered by mobile and the internet and yet haven’t been.”

Some organizations are already making use of the metaverse in their businesses. Here are examples of real-world metaverse applications:

• For entertainment, you might attend a virtual concert or event: Lil Nas X performed in online gaming platform Roblox during the pandemic, for example.
• In healthcare, AR displays were recently used to perform surgeries on live patients at Johns Hopkins Hospital, helping its Neurosurgical Spine Center to execute tasks better than ever.
• Educational providers are creating coursework and materials that give teachers new ways to express and participate in classrooms; imagine that instead of building a papier-mâché model of a volcano you could virtually experience being the magma that’s ejected into the atmosphere.
• In heavy industries and other contexts, VR is being applied to help teach people new vocational skills, such as repairing trucks or other equipment—in some cases shortening training time considerably. And in field operations, people are using AR for remote assistance, which could be even more interesting as organizations begin to use the data generated from this process.
• In fashion and luxury, brands have made inroads. Take, for instance, Decentraland’s Metaverse Fashion Week in March 2022, which received significant industry attention and attracted brands such as Dolce & Gabbana, Estée Lauder, and Etro. The Gucci Garden, launched in 2021 in the Roblox gaming metaverse, saw 19 million visitors. Or consider new business models for virtual fashion, for instance, built around technology allowing for online showrooms or for 3-D virtual runways.

Cross-border E-commerce

Cross-border e-commerce refers to the buying and selling goods and services online between individuals or businesses in different countries. This type of e-commerce involves the exchange of goods and services across international borders through the internet, allowing businesses to reach a wider customer base, expand into new markets, and increase sales. Consumers also benefit from access to a wider range of better products and services at competitive prices.

The China E-commerce market is expected to register a CAGR of 11.3% during the period 2022-2027. The primary factors driving the growth of the E-commerce market in the region are smartphone-driven M-commerce culture, innovative digital payments systems, and rising live -commerce platforms, among others.

·        With a vast population, the Chinese E-commerce market is the world’s largest E-commerce market. Chinese E-commerce market evolved rapidly during the past few years, primarily driven by high internet and smartphone penetration, increasing consumer confidence in online shopping, the emergence of e-commerce platforms, and the availability of various alternative payment solutions.

·        Alternative payment solutions were the primary beneficiary of rising e-commerce purchases. Payment solutions such as Alipay and WeChat Pay are rapidly growing as payment solutions for E-commerce platforms. While Alipay benefits as a primary payment tool on all the e-commerce platforms owned by the Alibaba group, WeChat Pay, which is offered by Tencent, leverages its massive social media user base to push online payments. As Chinese customers continue to embrace e-commerce, these payment solutions are further expected to gain momentum.

·        Furthermore, an inconvenient and often confrontational in-person shopping culture helped motivate shoppers in the region to embrace the straightforward reliability of E-commerce platforms, mainly the ease it offered in various shopping activities for making returns and securing refunds for online orders. Moreover, the supply of low-cost delivery services provided by China’s millions of migrant laborers enabled companies like JD.com and AlibabaGroup to provide same-day delivery anywhere in the country.

·        However, stringent rules and regulations related to local E-commerce law and Intellectual Property Enforcement for E-commerce platforms can create problems for E-commerce companies which can hamper the market's growth. For instance, the E-Commerce Law in China is designed to address rampant online infringement of intellectual property rights. The law included requirements related to notice-and-takedown mechanisms for the region’s e-commerce platforms. The notice-and-takedown tools allow individuals to request that platforms take down links offering products that infringe on established IP rights. As different E-commerce platforms have varying procedures for accepting takedown notices, E-commerce companies in the region must familiarize themselves with takedown procedures for various e-commerce platforms.

·        The COVID-19 outbreak has further driven e-commerce activities in China, as concerned consumers are increasingly using the online channel for their purchases to avoid getting exposed to the disease. Although the COVID-19 pandemic decreased overall consumer spending, it has resulted in growth in e-commerce purchases. While sectors such as travel and restaurant services were affected due to lockdown across the country, strong growth is seen in online purchases of groceries and physical goods.

China E-commerce Industry Segmentation

E-commerce refers to any form of business transaction conducted online or over the internet. The most common example of E-commerce is online shopping, which is defined as buying and selling goods or services via the internet on any device.

The China E-commerce Market is Segmented into B2C E-commerce (Beauty and Personal Care, Consumer Electronics, Fashion and Apparel, Food and Beverage, Furniture and Home), and B2B E-commerce.

China E-commerce Market Trends

This section covers the major market trends shaping the China E-commerce Market according to our research experts:

Livestream E-commerce to drive the Market

·        Livestreaming is a very popular form of E-commerce in China where Key Opinion Leaders conduct live video broadcasts of themselves while they market different goods and products to their audiences. The pandemic has led to the rapid advancement and adoption of live streaming in the E-commerce market in the region.

·        The most significant advantage of live streaming E-commerce is its ability to reach a large number of people spread throughout the country, especially those outside of major cities. By targeting live streams to more rural areas and lower-tier cities, companies can increase brand awareness and expand their audience to all parts of China.

·        Many E-commerce giants like Alibaba’s Taobao, JD.com, and newer competitors from the entertainment side like Douyin and Kuaishou, are promoting E-commerce products live via digital video in the region. Live commerce quickly established itself as a fixture in sales campaigns for Singles’ Day, a major shopping event in China, as a reliable digital tool for driving customer engagement and E-commerce sales.

·        Moreover, as reported by the China Internet Network Information Center, the number of online streaming users is rapidly increasing in China. For instance, the number of online streamers rose from 344.31 million in 2016 to 703.37 million users in 2021. Furthermore, live commerce increases a brand’s appeal and distinctiveness and attracts additional consumers. It can strengthen the positioning of E-commerce among existing customers and attract new ones, especially young people keen on innovative shopping formats and experiences.

·        All of the aforementioned factors are further expected to boost the growth of the E-commerce Market in the region.

Growing Penetration of Online Shoppers to Boost the E-commerce Market

·        The rising popularity of online shopping resulted in an increase in the number of online shoppers in the region, supported by high mobile internet penetration and the accessibility and speed of the internet in China. For instance, as reported by the China Internet Network Information Center, the number of online shoppers rose from 466.7 million in 2016 to 842.1 million in 2021. The rapid increase in online shoppers is further expected to boost E-commerce sales in the region.

·        Along with this, the online shopping penetration increased in the region, supported by the rise of smartphone-driven M-commerce and innovative digital payment solutions offered by various market players in the area. For instance, the China Internet Network Information Center reported that the online shopping penetration was 60% in 2015, which grew to 81.6% in 2021.

·        Furthermore, the Singles Day shopping event in China, November 11th or 11/11, is the busiest online shopping day of the year. Brands offer discounts and potentially generate a significant percentage of their annual revenue. This type of event further attracts consumers to shop online, which results in an increase in the number of online shoppers driving the E-commerce market in the country.

·        Moreover, as a result of growing online shoppers, the E-commerce share of total retail sales in consumer goods has rapidly increased over the past few years in the region. For instance, as reported by the National Bureau of Statistics of China, the E-commerce share of total retail sales in consumer goods in China was 10.8% in 2015, which increased dramatically to 24.5% in 2021 with a massive increase of 13.7%. All of the factors mentioned above further accelerate the growth of the E-commerce market in the region.