E-commerce: USA vs China

by Sean Ogino |

E-commerce: USA vs China

As the worlds population surges every year, China is poised to become the biggest online marketplace in the world within the next few years. China has approximately 193 million online shoppers which is more than any other country. In the next few years, these Chinese consumers will be spending $1000 per year online which is close to what U.S. online shoppers spend today.

According to Barclays Capital, online retail generated $121 billion in sales in China in 2011, up 66% from 2010. China’s ecommerce market is expected to grow to $420 billion by 2015, 20% more than what the U.S.’s ecommerce market is estimated to bring in the same time period. This rapid growth in China’s e-commerce can be attributed to the increase of it’s middle class, the growth of high-speed Internet access (government subsidized) and the rapid penetration of mobile devices. In addition to these changes, falling shipping prices and increasing shipping reliability is also contributing to the fast growth of e-commerce in China.

Still, e-commerce is a young industry in China and there is room for much more growth. Although there are more people shopping online in China than in the U.S., only 14% of China’s population shop online compared to 54% in the U.S. There are also factors that are holding back China’s e-commerce industry. Trust is still an issue as credit card fraud and counterfeit goods run rampant. With that said, the introduction of services like PayPal and increased security measure during shipping are mitigating these two negative factors.

It is exciting to see the possibilities created by China’s emerging e-commerce industry. U.S. companies hoping to venture into China must tread carefully as e-commerce there is a very different beast.

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