China is set to become the world’s biggest online market with online sales forecast to exceed $420 billion annually by 2020.
According to global management consulting firm McKinsey & Co, online sales are expected to reach between $420 billion and $650 billion, driven by a growing consumer class and the world’s largest population of internet users, now more than 500 million people.
“China is poised to become the world’s largest e-tailing market,” McKinsey said, adding sales in 2020 would match the current size of the US, Japanese, British, German and French markets combined.
China’s online retail sales reached $120 billion in 2011 and surged further to an estimated $190 billion to $210 billion last year. That put China second in the global ‘e-tail’ market, close to the United States, the current world leader, which had estimated online retail sales of $220 billion to $230 billion in 2012, the McKinsey report said.
Online retail sales now account for five to six percent of total Chinese consumer transactions, the report called China’s e-tail revolution: Online shopping as a catalyst for growth, added.
“China could forgo the national expansion of physical stores commonly seen in Western nations and move directly to a more digital retail environment,” the report predicted, adding that “China may have largely sat out the 19th-century Industrial Revolution, but as the explosion of its new consuming class continues to reshape 21st-century economic life, e-tailing and the Internet revolution have important roles to play.”
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