Monday, April 22, 2024

China poised to topple US as world’s leading retail market

China will overtake the US in retail sales in 2019, driven by booming ecommerce, according to new data.

In fact, China’s retail sales this year will surpass that of the US by more than $100 billion, predicts eMarketer’s latest worldwide retail and ecommerce forecast.

In 2019, China’s total retail sales will grow 7.5 per cent to reach $5.636 trillion. By comparison, US retail sales will grow 3.3 per cent to $5.529 trillion. Growth rates are slowing for both countries, but China’s growth rate will exceed that of the US through 2022.

China: a new middle class

“In recent years, consumers in China have experienced rising incomes,” Senior Forecasting Director at eMarketer Monica Peart said. “This has catapulted millions into the new middle class. The result has been marked rise in purchasing power and average spending per person.”

Ecommerce is a major driver of China’s retail economy. In 2019 alone, sales grew more than 30 per cent to reach $1.989 trillion. This means more than a third (35.3 per cent) of China’s retail sales occur online – by far the highest rate in the world. The US lags far behind, with ecommerce on track to represent just 10.9 per cent of its retail sales. China overtook the US in ecommerce sales in 2013.

More than half of all global online sales

By the end of this year, China will have 55.8 per cent of all online retail sales globally. And that figure will exceed 63 per cent by 2022, according to projections. By contrast, the US’s share of the global ecommerce market will drop to 15 per cent by 2022.

Alibaba will lead ecommerce sales in China with a 53.3 per cent share. But its share has been steadily declining for several years now, as smaller players erode its dominance. In particular, social commerce platform Pinduoduo has enjoyed triple-digit growth since 2016, although its share remains small.

Ms Peart said: “Relative newcomers and multichannel retailers continue to take share from giants Alibaba and

“The mature players set their sights on further international expansion. Smaller local players are finding their niche in the Chinese ecommerce market by integrating WeChat. They’re also using online-to-offline data to target consumers better.”

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