China is poised to become the world’s leading retail market this year as sales grow 7.5% to reach $5.636 trillion.
The growth will see China’s retail sales surpass the US by more than $100bn with the US market forecast to grow 3.3% to reach $5.529trn, according to figures from eMarketer.
However, while both countries are forecast to maintain retail growth in 2019, these rates are slowing, but China’s growth rate will exceed that of the US through to 2022.
China’s behemoth e-commerce market remains the major driver behind the growth, with online sales accounting for more than 35% of China’s entire retail sales, which represents the highest share globally. By comparison, e-commerce sales in the US equate to just 10% of total retail sales.
China will have 55.8% of all online retail sales globally, with that figure expected to exceed 63% by 2022. The US’s share of the global e-commerce market is expected to drop to 15% by 2022.
China’s e-commerce sales are forecast to grow more than 30% this year to reach $1.989trn.
Globally, China accounts for more than half (55.8%) of all online retail sales, with that figure expected to rise to 63% by 2022. Meanwhile, the US share of the global e-commerce market is expected to drop to 15% in 2022.
Alibaba remains the dominant e-commerce player in China with its Tmall and Taobao platforms accounting for more than 53% of online retail sales, ahead of rival JD.com which has 16%.
The popularity of social commerce platform Pinduoduo continues to chip away at Alibaba’s dominance with the company experiencing rapid triple-digit growth in the last two years to achieve a 7% of e-commerce sales.
Monica Peart, senior forecasting director at eMarketer, said, “In recent years, consumers in China have experienced rising incomes, catapulting millions into the new middle class. The result has been marked rise in purchasing power and average spending per person.”
“Relative newcomers and multichannel retailers continue to take share from giants Alibaba and JD.com. The mature players set their sights on further international expansion. Smaller local players are finding their niche in the Chinese e-commerce market by integrating WeChat and using online-to-offline data to better target consumers.”
The Drum magazine's March issue will focus on various elements and companies of the Chinese market and elements that advertisers around the world must become more familiar with as it expands.