China is set to become the world's largest online retail market, with sales expected to triple to $360 billion by 2015, according to a report from The Boston Consulting Group.
The main reason for the prospective boom is powered both by growing numbers of Internet users and by greater consumer acceptance of e-commerce. According to the report, by 2015, China will have 701 million Internet users, up from the 513 million the country currently has. This will bring total Internet penetration in China to 51 percent. Average time online per user increased from 2.8 to 3.6 hours per day between 2008 and 2011. Chinese users spend about an hour a day more on the Internet than U.S. users.
In 2011, Chinese consumers spent 1.9 billion hours a day online -- an increase of 60 percent from two years earlier, according to "China's Digital Generations 3.0: The Online Empire."
Christoph Nettesheim, a BCG Senior Partner and Co-Author of the report said, "In just a few years, China has become the largest Internet market in the world. It will shortly be the most significant, too. Companies with global ambitions need to have an active online presence in China if they expect to succeed."
China's e-commerce companies are already benefiting from the uptick in online consumer demand. E-commerce giant Alibaba Group for example manages two of the largest online retail sites in the country, Taobao Mall, and Taobao Marketplace, which have more than 400 million users. China currently has 193 million online shoppers, compared with 170 million in the U.S. Between 2009 and 2011, the share of Internet users who shop online rose from 28 percent to 36 percent. The share of online shoppers will likely reach 47 percent by 2015.
"Faster than in any other major economy, the Internet is becoming embedded in Chinese society," said David C. Michael, a BCG Senior Partner and Co-Author of the report. "The rapid growth represents an once-in-a-lifetime opportunity for companies that figure out how to connect with China's digital generations."
Most companies have not yet shifted their marketing budgets and orientation to the online world. The share of overall ad spending devoted to the online channel is expected to rise from an estimated 13 percent in 2011 to 17 percent in 2015 -- far less than the 64 percent of media time that users now devote to the Internet.
April 22, 2013, 5:55 am UTC
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