Increasing internet penetration in China and the development of online businesses and services will continue to drive high growth in the online shopping industry, reports IBISWorld.

Over the five years through 2012, online shopping industry revenue has been rising rapidly at an annual rate of 81.6 per cent. The industry is expected to generate US$178.5 billion by the year end.

The top four online retailers, Alibaba Group (Taobao), 360buy, Tencent Holdings (PaiPai), and Amazon account for over three-quarters of total industry revenue. However, the market shares of these players have decreased slightly over recent years with new companies entering the industry.

Despite the global financial crisis, the online shopping industry in China performed strongly in 2008 and 2009. Products sold online are generally priced lower than in bricks-and-mortar stores. As such, people turned to cheaper goods online.

Constantly improving living standards and increasing disposable personal incomes have increased internet access across the population.

IBISWorld anticipates that the industry will continue to expand with the improvement of comprehensive services and increasing internet penetration. In addition, the Chinese government is expected to implement new regulations to ease consumer security and product quality concerns.

GB