For those attuned to recent developments in the world of e-commerce, the news that online spending in China could hit $1 trillion in four years’ time will come as little surprise.
The latest global market outlook from Forrester Research predicts China to become the very first nation to host an internet economy capable of eclipsing a 13-figure sum. To put things into perspective, online spending in the UK has been tipped to hit a more than respectable €81 billion by 2018, with the US managing €414 billion.
So, how has China turned so many of its 1.4 billion-strong population into online shoppers?
High rates of smartphone and tablet penetration are enabling countries in the Western world to grow their online shopping economies with little need for encouragement. A similar situation is playing out in China, where sales on mobile are expected to increase at a compound annual growth rate of 44.2% between 2014 - 2019.
Forrester highlights that smartphones are the main gateway for online shopping in lower-tier cities where they are also used as the primary means of gaining network access.
From online to offline
More and more companies in China are migrating to the online model as a way of offering a whole new level of convenience to their customers.
Online stores have proved popular among fashion and consumer electronics sellers, but Forrester says even pharmaceutical companies are attempting to capitalise on their country’s connected population.
According to the group, the demand for offerings from these new e-commerce categories will be aided by water-tight logistics and a strong variety of products.
Homegrown sites like Tmall, Alibaba and JD.com are recognised as big earners in China, although the demand for imported items remains strong.
Forrester says Chinese consumers have taken well to ordering products from overseas, and their growing acceptance of this could see the likes of Britain and the US benefit from the country’s rising online economy.
A strong service
Where Forrester has applied a degree of warning is in the targeting of Chinese consumers. The group highlights the stellar work done by local e-commerce firms in building a highly innovative shopping network, and new entrants have been advised to blend in as best they can.
“To capture the opportunities in the increasingly competitive retail market, organisations must realize the importance of digital capabilities,” says Vanessa Zeng, senior analyst at Forrester Research.
“Successful organisations must drive innovation to deliver compelling shopping experience and focus on enhanced customer segmentation, offering seamless customer experience across touchpoints, and leverage mobile to drive overall online retail business.”
Despite operating in a market with a much lower worth than China’s, retailers in Britain can at least take positives from the fact they are targeting the world’s most valuable consumers.
Data from emarketer shows the average British shopper spending $3,585 online in 2013. while Chinese consumers managed an annual total of $501.