China’s economy may be slowing down, but the country is still set to eclipse the United States as the world’s top retail market for the first time.
Retail sales in China will reach more than $5.6 trillion this year, about $100 billion more than in the United States, according to research published Wednesday by consulting firm eMarketer.
The Chinese population’s growing wealth and the rapid development of e-commerce have driven the country’s epic retail boom.
“In recent years, consumers in China have experienced rising incomes, catapulting millions into the new middle class,” said Monica Peart, senior forecasting director at eMarketer. “The result has been a marked rise in purchasing power and average spending per person.”
The firm’s prediction highlights China’s increasing importance as a market for global brands even as growth overall cools. The country is already the world’s largest market for cars and smartphones.
The gap between the Chinese and US retail markets is set to widen in the coming years, with China’s growing more quickly through at least 2022, according to eMarketer.
China’s biggest e-commerce companies, Alibaba (BABA) and JD.com (JD), have played a key role in the industry’s explosive growth. More than 35%, or almost $2 trillion, of Chinese retail spending is expected to take place online this year, eMarketer said, compared with just 11% in the United States.