China is expected to top the U.S. as the world’s largest retail market this year, a new report says, underscoring the Asian country’s growing middle class and shift to a consumer-driven economy.
Retail sales in China are forecast to grow 7.5 percent to $5.6 trillion in 2019, according to eMarketer’s worldwide retail and e-commerce forecast. Meanwhile, U.S. retail sales are projected to increase 3.3 percent to $5.5 trillion. While growth is slowing for both countries, China is expected to outpace the U.S. through 2022, the report says.
“In recent years, consumers in China have experienced rising incomes, catapulting millions into the new middle class,” says Monica Peart, senior forecasting director at eMarketer.
China is already the world’s leader in e-commerce sales, with 35.3 percent of the country’s retail sales set to take place online this year, eMarketer estimates, compared to 10.9 percent in the U.S. China’s ecommerce sales are projected to grow 30 percent to $1.9 trillion in 2019.
By the end of the year, China will comprise 55.8 percent of the world’s online retail sales, the report says.
Shoppers outside Apple's store in Nanjing, China. Will the crowds thin out? (Photo: Apple)
While Alibaba will account for 53.3 percent of China's ecommerce sales this year, its share has been declining as smaller players like social commerce platform Pinduoduogrow, eMarketer says.For the past decade or so, the Chinese government has been trying to shift the underpinnings of the country’s economy from factory exports and commercial and residential investment to consumption.
“It has really picked up in the last three to five years,” Peart says, a trend highlighted by China's expected rise to .
Millions of Chinese workers have moved from rural to urban areas and realized significant wage increases.
The U.S., however, still far outpaces China in per capita retail spending annually, with projected 2019 sales of $16,661 in the U.S. and $4,056 in China, the study says.