China will this year surpass the US to become the world’s largest retail market according to a new report released today by eMarketer.
Chinese shoppers will spend US$4.886 trillion this year, compared with $4.823 trillion in the US, according to eMarketer’s worldwide retail forecast.
China is already the world’s largest retail eCommerce market, with sales expected to top $899.09 billion this year, representing almost half (47 per cent) of global digital sales.
With China having one of the most developed eCommerce markets in the world, eMarketer expects purchases made digitally will represent a globe-topping 18.4 per cent of the country’s total retail sales this year.
“China will continue to see massive gains in retail eCommerce over the next few years, with sales topping $2.416 trillion in 2020. Spending via mobile is also booming and this year will account for 55.5 per cent of all eCommerce sales and reach 68 per cent by 2020,” the research reports.
China’s booming eCommerce markets can be attributed in part to the proliferation of the dominant domestic marketplaces such as Alibaba, Tmall and JD.com, which took advantage of the country’s undeveloped traditional retail infrastructure.
Monica Peart, forecasting director at eMarketer said the three eCommerce platforms positioned themselves well to capitalise on growing consumer demand by creating their own payment systems (for example, Alibaba’s Alipay) and logistical services (for example, JD.com operates its own logistics network).
“In addition, with rising incomes and increased internet access in rural areas the cultural appetite to shop digitally will continue and we can expect to see further growth in mobile spend,” she said.
Asia-Pacific as a whole remains the world’s largest retail eCommerce market, with sales expected to top $1 trillion in 2016 and more than double to $2.725 trillion by 2020. According to eMarketer’s forecast, the region will also see the fastest rise in retail eCommerce sales, climbing 31.5 per cent this year. Expanding middle classes, greater mobile and internet penetration, growing competition of eCommerce players and improving logistics and infrastructure will all help to fuel eCommerce growth in the region, the report concluded.
Asia-Pacific will continue to lead all regions in total retail sales with $8.997 trillion this year, accounting for 40.8 per cent of the global total.
“Burgeoning consumer economies in China, India and Indonesia will drive retail sales over the next four years as disposable incomes in those countries continue to rise.”
eMarketer specialises in research on digital marketing.