Chinese Report: China E-Commerce Market To Pass U.S

By DOUG TSURUOKA, INVESTOR'S BUSINESS DAILY Posted 02:09 PM ET

A Chinese think tank says that the transaction size or sales value of China's online shopping market will surpass Japan in 2012, and exceed the U.S. by 2013, making it the world's largest online trading market.

The prediction was part of a China Business Development Report Forecast for 2011-2012 issued by the government-run National Academy of Economic Strategy on Thursday. The group is part of the influential Chinese Academy of Social Sciences. The forecast details were first reported by China's Economic Information Daily and later picked up by state-run China Daily.

The report said China's overall e-commerce market grew by 45.8% in 2011. There's said to be lots of room to grow, since almost half of Chinese chain stores have yet to start selling online. Online shopping is said to account for only 4.3% of the country's total retail sales of consumer goods.

But the Chinese Academy report noted that even if China becomes the world's largest online trading market in the next year, the jump in e-tail sales isn't enough to counter general weaknesses in China's distribution industry.

Jing Linbo, vice president of the National Academy of Economic Strategy, was quoted as saying that the problem lies in the unclear positioning of China's system for distributing products and services. Jing says the issues include market segmentation, poorly concentrated enterprises, lack of competition and the need to improve employee training.

An upsurge in China's e-commerce market would be good news for Amazon (AMZN) which sells in China through its local unit amazon.cn. Chinese search engine Baidu (BIDU) will also benefit as more Chinese consumers and stores go online.

Forrester Research estimated in January that the size of China's e-commerce market would reach $94.6 billion this year. Tracker eMarketer forecasts that China will become the world's biggest e-commerce marketplace by 2015.