Alibaba proves that China is at ‘peak smartphone’

China has so many smartphone users that most of its market for phones is people upgrading their gizmos. That’s why phone brands are turning to markets like India for growth. Photo credit: SteveC.

Now that pretty much every adult in China has a smartphone, the nation’s tech giants are seeing that most people use their services on mobile devices.

Alibaba proved that today in its newest earnings report, which shows that nearly three-quarters – 73 percent, to be precise – of consumer spending on its Taobao and Tmall stores comes from shoppers using phones or tablets. That’s a record high.

Alibaba’s China marketplaces saw a total of US$115 billion in spending in the first three months of the year, which is up 24 percent year-over-year. China’s ecommerce titan now has 423 million annual active buyers, according to its Q1 financials.

China is well ahead of America, which remains the United States of PC.

Alibaba’s increasingly mobile shoppers are the latest evidence that China is long past its PC era. People are not just using their phones for reading and games – they’re now doing pretty much everything on those smartphones, from basic grocery shopping to in-store payments to managing an online personal wealth fund.

China as a whole will see 55.5 percent of ecommerce spending done on mobile in 2016, according to projections from eMarketer, so Alibaba’s customers are ahead of the curve. The country is well ahead of America, which remains the United States of PC. Over in the US, mobile commerce will be an estimated 25 percent of total ecommerce this year.

“China’s growing middle class and the country’s shift to a consumption and service driven economy will continue to spur Alibaba’s growth despite China’s economic slowdown,” said Andria Cheng, an analyst at eMarketer. “Increased mobile shopping and rural market demand will remain key growth opportunities. China’s voracious appetite for foreign goods also spells another big opportunity on the cross-border ecommerce front.”

All that spending helped Alibaba hit a total revenue of US$3.75 billion in Q1, up 39 percent from the same period a year prior. “The total revenue growth rate is the highest over the past four quarters,” noted the earnings report.

See more China data:

• For first time ever, Baidu now sees most of traffic come from mobile
• China’s smartphone growth will grind to a halt this year: IDC
• China’s ecommerce spending to blast past $1 trillion in 2017