ONLINE SHOPPING
image

The Next Big Thing

China's mobile e-commerce market miles ahead of US, to grow to US$505 billion by 2016

PUBLISHED : Tuesday, 04 August, 2015, 7:00am
UPDATED : Tuesday, 04 August, 2015, 7:00am

Mobile e-commerce sales will account for more than half of all online retail shopping in China by 2016, according to new data.

New York-based research firm eMarketer predicted that mobile e-commerce sales will make up 10.9 per cent of total retail sales in the country next year, and 55.5 per cent of total online retail shopping, as the sector grows 51.42 per cent to reach a record high of US$505.74 billion, up from an estimated US$333.99 billion this year.

That milestone would further widen the gap between mainland China and the United States in terms of total retail transactions over smartphones, media tablets and other mobile devices.

Mobile e-commerce sales in the US are forecast to advance 28.41 per cent to US$96.22 billion next year, from an estimated US$74.93 billion this year. US mobile e-commerce transactions will only account for 1.9 per cent of total retail sales in the world's largest economy next year.

Monica Peart, a forecasting analyst at eMarketer, said in a report that those figures indicated that mainland China's retail market is more digital -- and specifically, more mobile -- than the US.

"An overwhelming majority of China’s internet users are regularly accessing the internet via mobile phones in 2015, 87.4 per cent versus that of US internet users at 74.6 per cent," Peart said.

"The sheer number of mobile internet users pushes retail e-commerce activities towards mobile devices in a way that is not yet seen in the US, where desktop computers still factor quite prominently for shopping activities."

The government-backed China Internet Network Information Centre last month reported that the total number of users who accessed the internet via mobile devices reached 594 million at the end of June. That was up from 557 million at the end of December.

The country's total number of internet users hit 668 million at the end of June, an increase of 18.9 million from 649 million at the end of last year.

READ MORE: Outrage as China mulls limiting online payments to US$800 a day, except through state-owned banks

New York-listed Alibaba Group, the world's largest e-commerce services provider, currently serves as the unofficial barometer for many analysts to determine how much retail shopping over mobile devices is growing in mainland China.

Alicia Yap, the head of China internet research at Barclays, said in a report that Alibaba's total mobile gross merchandise volume in its fiscal first quarter ended June is projected to reach 363 billion yuan (US$58.36 billion), up 121 per cent year on year.

In online retailing, gross merchandise volume represents the total transaction value for goods sold through a particular e-commerce marketplace over a certain period of time.

That estimated total volume for mobile sales at Alibaba, would account for 53 per cent of the company's forecast total mainland China gross merchandise volume of 679 billion yuan in the quarter ended June, according to Barclays.