Move over retail -- e-tailing--online retail, is booming in China. The latest report by consulting firm Mckinsey shows this sector is becoming a driving catalyst for China’s economic growth. It also points out that the country is set to take over as THE global leader in online shopping. Laura Luo has the details.
China’s e-tailing is leading a revolution.
It posted an estimated 190 to 210 billion U.S dollars revenue in a single year in 2012, almost levelling the U.S as the world’s largest e-tailing market.
But its annual growth rate of 60 percent in 2012 had no competitor.
So where will this market surge to in a few years’ time?
"The e-tailing market may reach 420 to 650 billion dollars by 2020. It will have a potential incremental boost of 4 to 7 percent into private consumption. "
The huge revenues are underpinned by the world’s largest on-line population.
130 million broadband accounts, far exceeding the 81 million accounts in the U.S.
And the space to grow, is still enormous.
"The internet penetration rate in China is only 30 percent, but the growth potential is 60 to 70 percent. "
"The report says e-commerce can shape a different future for China, as it skips over expansion of physical stores, and move directly to a digital retail environment. Does it mean boutique stores that form the body and souls of most Chinese cities are going to disappear one day?"
"I think boutique stores that have differentiations will thrive, particularly because they have a niche market."
Chen also says that China is no longer lagging behind the late tidewave of technology revolution. A combination of increasing consumption power and technological literacy are likely to become a huge driving force for the overall economy, providing opportunities for the country to step up as a global leader.