China tipped to overtake US as world’s largest retail market this year
New York-based eMarketer says annual mainland spending forecast to grow 13.3pc to US$4.886 trillion, to edge past the United States’ US$4.823 trillion
The Chinese mainland, home to the world’s biggest e-commerce market, is predicted to overtake the United States in annual retail sales by the end of this year, according to data released on Thursday by New York-based research firm eMarketer.
Total retail spending on the mainland is forecast to grow 13.3 per cent to reach US$4.886 trillion this year, up from US$4.313 trillion last year, to edge past the estimated US$4.823 trillion expenditure in the US in the same period, eMarketer said.
The milestone for China, which counts a potential 1.4 billion consumers, would come two years earlier than expected.
Global professional services firm PwC last year forecast China to become the world’s largest retail market overall by 2018, after overtaking the US as the global e-commerce leader in 2013.
Monica Beart, the forecasting director at eMarketer, said e-commerce will continue to anchor overall retail growth on the mainland amid the expansion of its middle class, deeper mobile and internet penetration, and improvement in logistics and infrastructure support.
"In addition, the country continues to make the switch from being a manufacturing-led economy to being a more service-driven and consumer economy," Beart said.
Retail e-commerce sales on the mainland are estimated to reach US$899.09 billion by end-December, which would “represent a globe-topping 18.4 per cent of the country’s total retail sales this year”, she said.
In the US, retail e-commerce sales are expected to account for 8.2 per cent of the overall retail spending this year in the world’s biggest economy.
The eMarketer data showed the gap between the overall retail spending in China and the US to significantly widen by 2020. Total retail sales on the mainland that year would hit US$7.086 trillion, compared with US$5.476 trillion in the US.
“China will continue to see massive gains in retail e-commerce over the next few years, with sales topping US$2.416 trillion in 2020,” Beart said.
Recent data from iResearch showed that Tmall.com, the main online shopping platform of Alibaba Group, cornered 58 per cent of China’s business-to-consumer e-commerce market last year.
Rival JD.com, which is backed by Tencent Holdings, had a 22.9 per cent share.
New York-listed Alibaba owns the South China Morning Post.
Beart pointed out that more and more Chinese consumers are shopping with their mobile devices.
With a buoyant mobile payments market, China is expected see mobile shopping account for 68 per cent of total retail e-commerce sales by 2020, up from 55.5 per cent this year.
Close to two-thirds of smartphone user on the mainland now make regular payments on their devices, according to a study released earlier this month by the China Internet Network Information Centre.
It said 64.7 per cent of smartphone users in the country, or about 424.5 million individuals, were making regular mobile payments in June, up 7 per cent from December last year.
The study also found the total number of internet users in the country reached 710 million at the end of June, almost double the population of the US and a 3.1 per cent increase from December. Some 656 million users access the internet via their mobile devices, it said.
“Alibaba’s Tmall and JD.com positioned themselves well to capitalise on growing consumer demand by creating their own payment systems and logistical services,” Beart said.
Beart added that “the cultural appetite to shop digitally will continue” amid rising incomes and increased internet access in China’s vast rural areas.