China’s retail market is expected to overtake the U.S. and become the world’s largest one as early as this year, eMarketer finds.
One recording-breaking sales figure after another, China’s e-commerce battle between JD.com, Alibaba and Pinduoduo, and the nationwide implementation of digital innovations, are helping the country’s retail market bounce back much quicker than the rest of the world’s, amid COVID-19 recovery. Meanwhile, the U.S. economy and its rate of consumption are expected to be impacted more negatively than China’s.
The market research company projects that China will produce $5.072 trillion in retail sales in 2020, despite a 4 percent decline from 2019, compared with $4.894 trillion in the U.S., as the American market will shrink by an even larger amount. EMarketer previously predicted China’s retail market will surpass the U.S. in 2021.
“China is amid the final stages of an economic maturation that precludes the ultra-high growth rates of years past, regardless of politics and policies. Its potential growth rates for consumption and retail sales are still higher than what the U.S. and other major markets will see in pandemic-ravaged 2020. That leaves China in a position to reclaim some degree of standout performance once the pandemic subsides,” eMarketer said.
Ethan Cramer-Flood, a forecasting writer at eMarketer, added that international factors — such as the protests in Hong Kong, territorial disputes with India and South East Asia countries, and the trade war with the U.S. — could impede China’s recovery.
“China has an economy that is deeply reliant on trade, globalization, cross-border investment and the performance of other major economies around the world. Regardless of how well the country’s system deals with the virus, good economic news may well be a long way off if the rest of the world slips into long-term recession,” he said.