China’s e-commerce market is expected to overshadow that of the United States this year to become the world’s largest, according to a report released by Bain & Company.
China’s e-commerce market has grown at an average rate of 71% from 2009 to 2012. The total size of the market is expected to reach RMB3.3 trillion ($539.07 billion) by 2015. The U.S. e-commerce market has grown 13% during the same period.
Total spending by Chinese consumers on online shopping reached US$212.4 billion in 2012, compared to US$228.7 billion in the US.
Chinese companies with retail outlets have had to realign their sales strategies to compete with online rivals who threaten to undercut them in an increasingly competitive market long dominated by e-commerce company Alibaba Group.
“It’s a massive change. It just means you need to be on the web, whether you like it or not,” said Serge Hoffmann, a partner at Bain and co-author of the report.
While still a small portion of total revenues, the growth of online sales is far outpacing offline sales growth.
Logistics pose a major obstacle to e-commerce development. Alibaba Group is working with Chinese logistics firms to improve nationwide infrastructure and delivery networks, which will be extremely advantageous in the future.