China’s online shopping industry is expected to generate $256.8 billion in 2013.

Over the past five years, industry revenue has been rising rapidly at an annualised rate of 65.9 per cent, says IBISWorld. This high growth is due to the increasing penetration level of e-commerce in China and the development of online businesses and the services they provide.

Despite the global financial crisis in 2008 and 2009, online shopping grew strongly as most products are sold online at lower prices than in bricks-and-mortar stores. In addition, the Beijing Olympic Games in 2008 boosted industry performance as the event led to an overall increase in Chinese consumption, says IBISWorld.

Industry concentration and competition are high, with the top four enterprises accounting for an estimated 86.9 per cent of industry revenue. The market share of the top four players, Alibaba (Taobao.com and Tmall.com), Jingdong Mall (360buy.com), Tencent (paipai.com) and Amazon China (amazon.cn), has decreased slightly in recent years.

With new retailers entering the industry and providing miscellaneous products, competition has become increasingly intense, says IBISWorld. However, top players will continue to make up the majority of industry revenue due to their established brand names.

IBISWorld anticipates that the online shopping industry will continue to expand and account for a greater market share within China’s retail sector.

With the improvement of comprehensive services and increasing internet penetration, revenue growth will be strong and steady, concludes IBISWorld.