China’s rapidly expanding internet user base represents a high-potential market for IT services companies. Mobile users account for an increasingly large share of China’s online population, and it’s via widespread mobile usage that we are seeing drastic changes in consumer behavior.
Chief among them is the growth of online retail. China is the world's largest online retail market, accounting for an estimated USD 1.05 billion in 20174, compared with USD 453.5 billion in the US6, and USD 111.3 billion in Japan5. Online retail now accounts for an estimated 19.6% (4) of total retail sales in China, compared with 13% in the US6, 17.9% in the UK7, and 8.2% in Japan2.
But China's internet sector has much more room for growth. Though its internet user base is the largest in the world, penetration rates (54.6% in 2016) lag behind developed markets such as the UK (94.8%), Japan (93.3%), and the US (87.9%)3, this factor, combined with government efforts to improve telecoms coverage as laid out in the 13th Five Year Plan, means this user base will likely grow considerably in the future.