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Forrester: Online Retail In China Will Hit $1T By 2019

Online shoppers in China are shifting to mobile, and that’s going to push retail e-commerce spending there past the $1 trillion mark in 2019, up from $307 billion in 2013, according to a new Forrester report.

That’s likely to maintain Alibaba’s domination of Chinese digital commerce, Forrester said. Alibaba’s Tmall currently has an e-commerce market share of 57 percent, with Tencent-backed JD.com trailing at 21 percent. But when it comes to mobile, Alibaba’s lead becomes staggering: Its Tmall and Taobao mobile apps and site have a combined share of 85 percent, with JD.com at 7.1 percent, TechCrunch reported in summarizing the Forrester report.

According to the “China Online Retail Forecast, 2014 To 2019” report, China’s online shoppers in major cities are rapidly ramping up the frequency of their mobile shopping, while those in smaller cities use smartphones as their primary means of network access, so mobile shopping is natural. A quarter of respondents told Forrester they do mobile shopping at least weekly, with 15 percent doing it every day and 4 percent several times a day.

China also blasted past the half-billion-mobile-users mark last year, with the government reporting the number of mobile Internet users climbed 11.4 percent to 557 million.

Another factor in the boom is that more traditionally offline product categories, including furniture and pharmaceuticals, are now being sold online, according to Forrester. The rising Chinese middle class is also pushing online demand for high-end products ranging from fresh food to imported goods and automobiles.

The combination of more smartphones, more usage and more products is pushing mobile spending up at a 44.2 percent compound annual growth rate, compared with 19.9 percent for desktop e-commerce, Forrester said.

That lines up with data from Statista, which show that in mid-2012, Alibaba’s mobile gross merchandise value (GMV) made up a modest 4.6 percent of total GMV. But by the end of 2014, Alibaba’s mobile GMV accounted for 42 percent of total GMV — almost 10 times the mobile share from less than three years earlier.

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