Propelled by an ongoing surge in e-commerce and mobile shopping, China is poised to surpass the U.S. this year to become the world’s largest retail market, according to a forecast by U.S.-based research firm eMarketer.
Total retail spending by mainland China consumers is expected to reach $4.89 trillion in 2016, compared with $4.82 trillion in the U.S., eMarketer reported. The forecast, if it pans out, would be a major milestone as China, the world’s most populous country with 1.4 billion people, eclipses the world’s wealthiest nation in consumer spending for the first time.
Despite an overall slowdown in China’s economy, the country has continued to show growth in its retail sector and particularly in online spending. China is already the world’s largest retail e-commerce market with online sales expected to top $899 billion this year, according to eMarketer. The research firm said it expects purchases made digitally will represent 18.4 percent of China’s total retail sales this year, the highest proportion of any country.
China “will continue to see massive gains in retail e-commerce over the next few years,” the eMarketer report stated, with sales topping $2.42 trillion in 2020.
Spending via mobile is also booming in China and this year will account for 55.5 percent of all e-commerce sales, reaching 68 percent by 2020, according to the report.
“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,” said Monica Peart, eMarketer forecasting director.
The Asia-Pacific region will continue to lead all regions in total retail sales with nearly $9 trillion this year, accounting for 40.8 percent of the global total. Burgeoning consumer economies in China, India and Indonesia will drive overall retail sales in Asia-Pacific over the next four years as disposable incomes in those countries continue to rise, eMarketer said.
Asia-Pacific retail e-commerce sales are expected this year to grow 31.5 percent—the fastest rate of any region—to $1 trillion. By 2020, the Asia-Pacific e-commerce market will more than double to $2.73 trillion, according to the eMarketer forecast.