Mintel is forecasting that online spending in China will reach 45.7 percent of total per capita retail spend in 2017, as the country continues to undergo a “fundamental shift” in the way consumers shop.
New research reveals that China’s online retail market has reached a “critical mass,” according to Mintel, with business-to-consumer online retail is expected to reach 60 percent plus of total e-commerce sales in 2017, with mobile online retail expected to make up 80 percent plus of the business-to-consumer retail category.
Total business-to-consumer and consumer-to-consumer online retail sales in China are expected to reach RMB 6.4 trillion by year-end 2017, having grown at a CAGR (compound annual growth rate) of 37.9 percent since 2012, growing nearly fivefold in value in five years.
Matthew Crabbe, research director, APAC, at Mintel said: “Mintel research reveals that online per capita spend in China is close to reaching a peak and there are a few reasons why this is happening. One issue is that consumers are increasingly buying experiences and services online, rather than products.
“The other issue is that consumers are already adapting to ‘new retail’; they are embracing greater integration between
online and in-store shopping. This will mean much tougher competition between retailers. It will also likely mean more pressure for further consolidation in the market, resulting in more mergers, acquisitions and strategic partnerships.”
China’s ‘new retail’ experience has consumers purchasing different products from different channels, with research showing that 72 percent of in-home food shoppers prefer to shop in-store, compared with 60 percent of consumers who prefer to shop online for toys, games, clothing, and accessories.
Crabbe added: “The growth in mobile online shopping across all sectors this year illustrates how mobile is driving the convergence of online and offline shopping into 'new retail'. Meanwhile, online shopping penetration is high across most sectors.”
The main driver of online retail’s success the research reveals is that 65 percent of urban Chinese consumers say they find products cheaper online, while 63 percent say that online offers more choice, and more than half (52 percent) of consumers say they find what they were looking for faster when shopping online.
By Danielle Wightman-Stone – Fashion United