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Rural areas to give growth boost to maturing online retail market in China

A new report, “China B2C E-Commerce Market 2017” has been released by yStats.com, a leading E-Commerce intelligence firm from Hamburg, Germany. This publication tells of the most important trends in the world’s largest online retail market, citing key statistics and forecasts. Among the predictions conveyed in this report is that China’s E-Commerce growth rate is expected to moderate through 2020, but rural areas provide potential for continued robust growth.

China is projected to account for more than 50% of the world’s online retail market in 2017, according to a forecast cited in this report from yStats.com. With its immense population size and high online shopper penetration among the Internet users, China maintains the lead in the global B2C E-Commerce arena in spite of its Internet penetration of just above 50% of total population.

With the online share of total retail sales in the country already in the double-digits, the Internet retail market in China is showing distinct signs of maturity. Among them are the growing contribution of the B2C segment and the retreating C2C share of total retail E-Commerce sales. Around two-thirds of Internet users in urban China already shop online, with this share even higher in the top cities. Due to these trends, various sources cited in this report by yStats.com expect the growth rate of China’s Internet retail sales to moderate in the coming years, declining from the high double-digit rate of recent years.

Nevertheless, more E-Commerce growth is still expected by 2020 driven through increasing Internet and online shopper penetration rates, growing frequency of online purchases by urban consumers and, most of all, from the surge of online retail sales in rural China. According to official statistics referenced in this report by yStats.com, online retail sales in China’s rural areas more than doubled between 2015 and 2016. Over half a billion people live in rural China, and yet they account for just above 25% of Internet users and even fewer online shoppers, indicating strong future growth potential.

Regarding the competition landscape, more than three-quarters of B2C E-Commerce sales in China come from the top two platforms, the largest of which is Tmall.com of Alibaba Group. Even though Tmall.com maintained its market share at more than 50% in 2016, the main runner-up, JD.com, managed to increase its share by a few percentage points compared to 2015, as yStats.com’s report reveals. Both players actively explore the synergy of online and offline retail channels through investments and partnerships with major store-based retailers.