China, already known to have the largest Internet population in the world, can now also claim the distinction of having the second-largest population of online shoppers—145 million people (versus 170 million in the United States). This is more than double the number in Japan and five times that of the United Kingdom. Moreover, online shopping will see exponential growth through 2015, with spending that could make China’s e-commerce market worth more than RMB 2 trillion and possibly surpass the size of the U.S. market.
The rapport of BCG perspectives surveys of more than 4,000 online shoppers across tier 1 through tier 5 cities make it clear that Chinese consumers, especially the coveted urban dwellers and those in the middle and affluent classes (MACs), are quickly adopting “multichannel” shopping behaviors, creating both opportunities and challenges for brand companies, retailers, and e-commerce companies alike. Organizations that have been quick to capture the attention of these consumers are already reaping significant benefits. Vancl.com, for example, has become one of China’s top-ten casual apparel brands (excluding sportswear) while selling exclusively online, with expected 2011 sales of RMB 8 billion (four times 2010 sales).
A few facts on e-commerce in China;
- In 2010, the e-commerce market in China was worth RMB 476 billion as transaction value (actual value of sales, including all fees), nearly double that of Japan or the United Kingdom and a drastic increase from RMB 128 billion in 2008.
- E-commerce penetration has grown rapidly from a low level. Less than 10 percent of China’s urban population shopped online in 2006. That figure jumped to 23 percent by 2010, and will nearly double to 44 percent by 2015, quickly narrowing the gap with the United States and other developed markets.
- By 2010, China had 457 million Internet users, with penetration of 52 percent in urban areas and 18 percent in rural areas. The number of e-commerce shoppers will take off through 2015, growing from 145 million people to 329 million.
- An astounding 30 million consumers are expected to shop online for the first time every year until 2015. That’s a population nearly the size of Canada’s beginning to shop online every single year.
- BCG forecasts that e-commerce will go from representing 3.3 percent of total retail value today to 7.4 percent in 2015. In the United States, it took ten years to achieve that growth. Our projection means that China will surpass the United States to become the largest e-commerce market in the world, achieving a compound annual growth rate of 33 percent, to reach more than RMB 2 trillion.
More from BCG perspective.