China to Overtake US in Online Retail Sales in 2013

China will replace the US as the world’s leading online retail market in 2013, according to an official forecast Tuesday by the Ministry of Commerce. The forecast assumes that online retail sales will continue its rapid growth, although not at the blistering pace seen in the past few years.

As of the end of 2011 China’s 194 million online shoppers spent 782.56 billion yuan ($123.72 billion) online for the year, a 53.7% jump over 2010, according to Li Jinqi, director of the Ministry’s information technology department. Online sales accounted for 4.32% of China’s total consumer retail goods sales volume for 2011.

“E-commerce has brought a change in the marketing model, and online retail is becoming a new growth engine,” said Li.

The leading online retail sales market is the United States which in 2011 posted $197 bil. accounting for 9% of total retail sales and 12% of non-grocery retail sales, according to Forrester Research. That represented a 12% jump over 2010. For 2012 US online retail sales are projected to grow 10% to $218 bil., accounting for 10% of total retail sales and 13% of non-grocery sales. Sales are projected to grow another 10% in 2013 to $240 bil.

China will overtake the US in online retail sales if its growth slows to 45% for 2012 to $179 bil., followed by 40% growth in 2013 to $251 bil.

Europe’s online sales grew by 18% in 2010 and 13% in 2011, according to Forrester. The population of online shoppers in Europe is expected to grow from 157 million in 2010 to 205 million by 2015, with total sales forecast to reach €133.6 bil. ($165.3 bil.).

China’s explosive online sales growth rate has raised the value of its e-commerce sector to 5.88 trillion yuan ($928 bil.) in 2011, up 29.2% from 2010, to 12.5% of China’s gross domestic product for 2011, according to a Ministry report. It noted that over 40% of China’s small and medium-sized firms have used e-commerce to maintain rapid growth despite a worsening business climate.