Sometime in early 2014, China will lay claim to leadership in yet another key global market: e-commerce.
Last year saw Chinese shoppers spend 1.3 trillion yuan ($213 billion) online, just slightly less than the $225 billion tally in the U.S. The Chinese online retailing market has grown at a scorching 71% compounded annual growth rate since 2009, about three times as fast as its American counterpart, according to a forecast by Bain & Company.
If that trend holds, China will officially become the world’s No. 1 e-commerce market when 2013 industry statistics become available in early next year. By 2015, Bain sees the Chinese market reaching $541 billion.
Bain pegs the digital penetration of China’s economy—or the value of online retail as a percentage of total retail—at 6%, higher than the U.S., Japan, and Germany. Chinese shoppers love making online purchases on their phones and tablets, and smartphone use is also higher in China than the U.S. on a relative basis. Some 8.6% of e-commerce transactions in China were done via mobile phones as of the end of the second quarter. On Singles Day, a Chinese holiday in mid-November that’s a local twist on Valentine’s Day and the biggest online shopping day of the year, 15.3% of all transactions were conducted on mobile devices.
Singles Day has become an epic e-commerce event in China and is a far bigger revenue haul for Internet players than Cyber Monday in the U.S. Alibaba Group Holding, China’s largest e-commerce company, broke its one-day sales record by more than 80 percent on this year’s Singles Day, a milestone that comes ahead of an initial public offering expected sometime in 2014 that could be valued higher than Facebook. Alibaba hasn’t announced a timetable for its public offering.
Taobao and Tmall, Alibaba’s two main e-tailing platforms, topped 35 billion yuan ($5.75 billion) in the 24-hour period, surpassing last year’s sales of 19.1 billion yuan.
