SINGAPORE: Just five key countries in Asia Pacific account for more online retail revenue than the US and all of Western Europe combined, according to a new report.
Research firm Forrester predicted that total online revenue in China, Japan, South Korea, India and Australia will nearly double from $733bn in 2015 to $1.4 trillion in 2020, ZDNet reported.
China alone is expected to be worth $1.1 trillion by 2020 and it remains the largest e-commerce market in the world despite its economic growth falling below 7% for the first time since 2009.
"While the days of staggering year over year e-commerce growth in China are gone, current growth rates are solid and more consistent with other mature markets in the region, like Japan and South Korea," said Forrester analyst Lily Varon.
She said China would continue to lead the region for e-commerce, growing to be nine times larger than Japan ($122bn) in 2020 and 17 times larger than South Korea ($65bn).
However, India is expected to be the fastest growing e-commerce market in the region with online sales growing more than fivefold to $75bn by 2020.
Forrester attributed India's vibrant growth to an increasing number of online buyers and per capita spend, but noted there remain challenges for online retailers in the country.
These include underdeveloped logistics, the "challenging" state of its last-mile connectivity as well as its cash-based culture.
The report went on to state that growth across the region is being driven by high internet and broadband penetration, a large percentage of online shopping and high per capita online spending.
Another regional characteristic is the dominance of web-only retailers, such as Flipkart and Snapdeal in India and Taobao and Tmall in China, suggesting that consumers are more attracted to "online pure plays" than sites operated by traditional retailers.
"Consumers have flocked to online pure-plays rather than their traditional retail counterparts," said Varon. "In very few markets in the region do traditional retailers hold any dominant position, or even come close to competing with the web-only giants."
Data sourced from ZDNet, Forrester; additional content by Warc staff