China’s online-shopping boom is expected to more than double over the next several years, a new report from Goldman Sachs shows.
Already the world’s largest, China’s online retailing market will grow to US$1.7 trillion by 2020 compared with US$750 billion last year, Goldman said. Anticipating the number of Chinese consumers shopping online will surge by an additional 200 million in the next few years from 460 million last year, Goldman analysts raised their forecast for total online retail sales in 2020 by 15%.
Stationary retail to fall rapidly behind
The forecast contradicts worries that China is facing an economic slowdown. Although Goldman Sachs acknowledged that there have been concerns of a slowdown, the investment group said it expects online retail growth "to sail on at 23% over 2016-2020, continuing to grow at nearly triple the pace of offline retail.” Alibaba Group, China’s largest e-tailer, reported “core commerce” revenue grew 45% year-over-year to US$6.7 billion in the quarter ended Dec. 31.
New multiple channel initiatives
Goldman also expects online penetration of China’s overall retail market to increase from 16% last year to 25% in 2020, up from a previous forecast of 22%.
The report said the next phase of growth in China online shopping will be fueled by ongoing expansion of the variety of goods available online; greater spending by consumers in smaller cities who are increasingly shopping online; and new “omnichannel” initiatives, the combination of online and offline resources by the country’s largest e-commerce platforms in partnership with brick-and-mortar retailers.
Nol van Fenema