The total retail sales in China is projected to exceed US$5.6trn in 2019, eclipsing that of the U.S. by around US$100 billion. The growth rate might fall from 8.5% in 2018 to 7.5%. Over 35% or US$2 trillion of that will come from online retail, as compared with 11% in the U.S., according to the report from eMarketer.
The leading online retailer Alibaba is to see a 20% growth in sales. However, considering the fierce competition from domestic emerging players like Pinduoduo, its shares might be just 53% this year, which reached as high as nearly 70% in 2016.
China is expected to raise its global presence to nearly 56% in the online retail market at the end of 2019 and over 63% by 2022. In contrast, the U.S.’s market share will drop from 17% to 15% in 2019.
Similar to Amazon, the internet giants have marched into the offline retail market. For example, Tencent led the investment of US$5bn to the operator of big shopping centers Wanda Commercial Real Estate in 2018. Tencent also holds a big stake in JD.com. Alibaba spent US$2.9bn to purchase SURRY (dubbed Walmart in China)’s 36% share in 2017.
Update: eMarketer’s mid-2019 update shows China would not surpass the US in total retail sales this year, as expected in its Q4 2018 forecast.