China set for online retail boom

08 November 2012

BEIJING: Ecommerce sales are likely to more than quadruple in China during the next four years, surpassing $450bn in the process, a forecast has predicted.

According to figures from eMarketer, the research firm, online business-to-consumer spending will reach $107bn in the country in 2012, measured against $55.3bn in 2011.

Looking further ahead, the organisation estimated that revenue levels are set to hit $177bn in 2013 and $285bn in 2014, indicative of the enormous potential held by this outlet.

While the growth rate will slow to a relatively modest 30.9% in 2015, returns should still stand at $373bn by this date, before expanding by another 22.8% to $458bn in 2016.

At present, China is the second largest ecommerce market in Asia behind Japan, and the fourth biggest worldwide. In 2013, it is expected to have overtaken Japan and only trail the US on a global basis.

One key driver of such trends will be the rapid increase in the amount of people acquiring goods in this way, rising from 178m in 2011 to 220m in 2012 to 423m in 2016.

At the end of the forecast period, fully 67% of Chinese web users should make online purchases, equivalent to 36.8% of the entire population. These totals stood at 39.5% and 15.9% in turn last year.

By way of comparison, the ecommerce audience currently contains 150m people in the US, where overall internet penetration comes in at around the 80% level.

Elswhere in its report, eMarketer suggested that increasing demand for a broad range of products among shoppers outside first and second tier cities will help fuel demand.

"Try buying the latest Sony camera or a limited-edition Louis Vuitton bag somewhere like Datong without going online," said Tim Schlick, senior vice president, strategy and market development, Asia-Pacific at Thoughtful Media Group.

Other factors supporting growth include the rising number of players opening up branded stores on Tmall, China's biggest ecommerce site.

"Ecommerce also has strong support from China's government, which believes online sales growth will help develop domestic sales across China's entire value chain," it added.

Data sourced from eMarketer; additional content by Warc staff