China's e-commerce sector is at a crossroads after nearly three decades of explosive growth, and a new policy blueprint has laid out a clear path forward — deepening integration with the real economy and accelerating brand-driven globalization, analysts said.

Earlier this month, the Ministry of Commerce, along with five other government departments, issued guidelines to build a high-quality development framework for the sector, with a focus on seeking new growth from integration of online and offline channels and overseas markets.

China has maintained its position as the world's largest online retail market for 13 consecutive years, covering 26 million domestic merchants and serving 3.2 billion consumers globally, the ministry said.

The country's online retail sales exceeded 15.97 trillion yuan ($2.34 trillion) in 2025, up 8.6 percent year-on-year, while e-commerce-related employment grew to 79 million.

Yet, beneath the numbers is a more nuanced picture. "The e-commerce penetration rate has been on the wane. Traditional traffic dividends have peaked," said Du Guochen, director of the e-commerce research institute of the Chinese Academy of International Trade and Economic Cooperation.

Du said the penetration rate of e-commerce, the share of online physical goods sales in total retail sales of consumer goods, peaked at 27.6 percent in 2023 before declining to 26.8 percent in 2024 and further to around 25 percent in 2025.

The slowing penetration rate suggests that simply chasing more users and transactions is no longer enough. To navigate the post-traffic era, Chinese e-commerce platforms are actively exploring new growth avenues. In late 2025, online services provider Meituan spent $717 million to fully acquire Dingdong Maicai, an online grocery platform.

Meituan said during an earnings call in late March the move was driven by the company's firm confidence in the "prospects of China's fresh food retail business, both online and offline".

Li Mingtao, chief e-commerce analyst at the China International Electronic Commerce Center, said that as the traffic-driven model peaks, e-commerce should pivot to leveraging its data, technology and ecosystem resources to empower the digital transformation of the real economy.

"This shift is about finding new growth increments through deeper integration with the real economy," Li said.

Du said that by offering lightweight, flexible digital solutions, platforms could help tens of millions of small and medium-sized enterprises undergo digital transformation — a massive B2B market in itself.

Moreover, Du said that e-commerce firms could further tap into rural markets by developing rural livestreaming businesses to boost agricultural sales while improving rural logistics. The potential for agricultural products to reach consumers online remains vast.

"This is a holistic approach to online-offline integrated development, transforming e-commerce and the real economy from a zero-sum game into a mutual-reinforcing relationship," Du added.

According to the National Bureau of Statistics, China's cross-border e-commerce imports and exports reached 2.75 trillion yuan in 2025, a 69.7 percent jump from 2020.

"For e-commerce, going global is no longer a question of whether to do it, but a question of how to do it well and sustain it," said Zhu Keli, founding director of the China Institute of New Economy.

E-commerce companies expanding overseas need to build capabilities in compliance, local operations, supply chain resilience, branding, digitalization and artificial intelligence, with compliance now the most urgent priority, Zhu said, adding that compliance should not be viewed as a cost, but as an "entry ticket" to overseas markets.

"Enterprises must establish systematic compliance systems covering data privacy, product certification, intellectual property and taxation," Zhu said.

wangkeju@chinadaily.com.cn