China’s e-commerce dominance was confirmed in a new report this week that pegged online consumer spend in China at $750 billion. The total, estimated by Boston Consulting Group in its report, is more than the U.S. and U.K. (the second- and third-largest e-commerce markets) combined. But, more than just the staggering total, the report illuminated fundamental differences between U.S. and China that will ensure the Asian economic powerhouse’s lead widens.
“When Amazon and e-tailing disrupted U.S. shopping in the 1990s, retailers and consumers alike had to rethink their deeply ingrained habits,” the report’s authors wrote. “By contrast, physical retail in China was less developed. The digital revolution coincided with the growth of disposable income and consumption. As a result, e-commerce quickly became the norm, and its development was fast-tracked to the point where China pulled ahead of the West.”
The other factor driving e-commerce in China to what BCG expects to be 20-percent annual growth over the next five years is the mobile-first mentality of Chinese consumers. BCG expects m-commerce in China to account for nearly three-quarters of online transactions by 2020 compared to only 46 percent for the rest of the world, enabling “hundreds of millions of new consumers” from China’s smaller cities and rural areas to join in the e-commerce spree as they come online via mobile.
- Cross-Border E-Commerce in Emerging Markets
- Cross-Border E-Commerce in Established Markets