In 2019 e-marketer.com forecasts that China will pass the US in total retail sales for the first time. China has more than half of the world’s retail e-commerce sales. Alibaba has more than half of China’s e-commerce market, but its share is falling.
China’s total retail sales will grow 7.5% to reach $5.636 trillion. US retail sales will grow 3.3% to reach $5.529 trillion. Growth rates are slowing for both countries, but China’s growth rate will exceed that of the US through 2022.
Contemporary measures of consumer spending include all private purchases of durable goods, nondurables and services. The US still has a large lead in consumer spending. US consumer spending was $14.1 trillion in 2018. US consumer spending will still be about double China’s in 2019.
China’s overall GDP was $13.7 trillion at the end of 2018 and should be about $14.7 trillion in 2019. US GDP was $21 trillion in 2018 and could be $21.7 trillion in 2019.
Nearly two-thirds of US consumer spending is on services, like real estate and healthcare. Other services include financial services, such as banking, investments, and insurance. Cable and internet services also count, and even services from non-profits.
The remaining one-third of US personal consumption expenditure is on goods. These are retail sales. These include so-called durable goods, such as washing machines, automobiles, and furniture. More frequently, we buy non-durable goods, such as gasoline, groceries, and clothing.
China’s total household debt was US$6.58 trillion at the end of June 2018, or 50.3% of its GDP, according to figures from the Bank for International Settlements. The total household debt in the USA is 76.6%. German household debt is 52.5% and Japan has 57.4%. China’s household debt was 18.6% in 2008.
“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 marked rise in purchasing power and average spending per person.”
E-commerce is a major driver of China’s retail economy, with sales growing more than 30% in 2019 to reach nearly $2.0 trillion. 35.3% of China’s retail sales occur online which by far the highest rate in the world. The US lags far behind, with e-commerce on track to represent 10.9% of its retail sales. China surpassed the US in e-commerce sales in 2013.
By the end of this year, China will have 55.8% of all online retail sales globally, with that figure expected to exceed 63% by 2022. The US’s share of the global e-commerce market is expected to drop to 15% by 2022.
Alibaba will lead e-commerce sales in China with a 53.3% share. Its share has been steadily declining for the past several years. Smaller players are taking e-commerce share. Social commerce platform Pinduoduo has seen triple-digit growth since 2016, although its share remains small.
Brian Wang is a Futurist Thought Leader and a popular Science blogger with 1 million readers per month. His blog Nextbigfuture.com is ranked #1 Science News Blog. It covers many disruptive technology and trends including Space, Robotics, Artificial Intelligence, Medicine, Anti-aging Biotechnology, and Nanotechnology.
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