China is set to become the first country in history that will see a majority of its retail sales conducted online instead of via traditional brick-and-mortar stores. That’s according to a new report from digital marketing research firm eMarketer. “China will take a step in its digital transformation this year that once would have seemed almost unthinkable,” the firm’s research note explains. “For the first time anywhere, a majority of retail sales for an entire country will transact online.”
Specifically, China is set to see 52.1% of all its retail sales conducted online at the end of 2021. That’s up a staggering 7.3% from 2020, where China saw 44.8% of its total retail sales conducted online. According to eMarketer the historic switch to a majority-online retail sales country is driven by two main factors:
- Social commerce: this refers to e-commerce transactions driven and conducted through social media channels. Tencent’s WeChat’s Mini Programs was a big driver of this, allowing third-party businesses to access always-connected shoppers. Another big driver on the social commerce side is livestreaming “Live Commerce” via video-centric social media apps like Douyin (what TikTok is called in China).
- The COVID-19 pandemic: The second major factor should surprise no one. As the coronavirus pandemic raged, people turned to the internet for everything from work to entertainment. As a result, consumer shopping behavior changed accordingly, too. And this change is expected to stick. eMarketer notes that online grocery shopping, particularly, surged.
But while China will see a shift to a predominantly e-commerce-driven retail sector, other countries are nowhere close to crossing the 50% threshold. South Korea is in second place, though e-commerce retail sales will only account for 28.9% of all retail sales in the country in 2021. America is even farther behind. Its e-commerce retail sales will only account for 15% of all retail sales in 2021.
And online sales are only set to grow in China. eMarketer says in 2022 online sales will surge another 11%, reaching 55.6% of total retail. That year the country is also expected to hit another e-commerce milestone: over $3 trillion USD in e-commerce retail sales alone.