NEW YORK/BEIJING: China, already the leading e-commerce market, will this year pass the US to become the single biggest retail market in the world, according to eMarketer.
The marketing and media research firm forecast that total retail sales (excluding travel and event tickets) would increase 13% in 2016 to reach $4.886 trillion; the US, however, is set to grow much more slowly, at just 2.6%, and will record total retail sales of $4.823 trillion.
The gap is set to widen over the next four years: by 2020 China's retail sales will stand at $7.086 trillion, while those of the US will amount to $5.476 trillion.
An increasing proportion of China's retail sales will be generated via e-commerce. The 18.4% eMarketer predicts for this year – amounting to $899bn – is another world-leading figure.
It will also equate to 47% of global retail e-commerce, a figure expected to top 50% next year and to near 60% by 2020.
The country's prominent position in e-commerce can be attributed to several factors, including an underdeveloped retail infrastructure which allowed major players in this market to rapidly gain a foothold.
"Alibaba, Tmall and JD.com positioned themselves well to capitalize on growing consumer demand by creating their own payment systems (e.g., Alibaba's Alipay) and logistical services (e.g., JD.com operates a self-owned logistics network)," noted Monica Peart, forecasting director at eMarketer.
"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 added.
Spending via mobile is expected to account for 55.5% of all e-commerce sales in 2016 and 68% by 2020.
While China is the most prominent retail e-commerce market, the Asia-Pacific region as a whole is growing fast, with eMarketer predicting a 31.5% increase this year.
Data sourced from eMarketer; additional content by Warc staff