Blog: What is the potential of online retail in China?

Dean Best | 20 May 2011

Anything to do with China's economy fascinates me and this week we have looked at the growth of online retail in the country in the wake of Wal-Mart's investment there.

The US retail giant has bought into Chinese online retailer Yihaodian, the first online supermarket to launch in the country.

Yihaodian, which means No.1 Store in Chinese, opened in Shanghai in 2008 but market research firm DDMA describes the company as China's only national online grocer.

The Chinese firm's presence - and the rationale for Wal-Mart's investment - are analysed at length in our latest Talking shop feature, which carries some interesting data, including a stat on Internet sales across the whole of the country, which, as a percentage of total retail sales is not far behind the US.

According to Wal-Mart vice-chairman (and CEO of its e-commerce arm) Eduardo Castro-Wright, online sales in China "are growing rapidly and are projected to match online sales in the US in the next few years".

Of course, the perennial problems in China - distribution, infrastructure, learning the demands of local consumers - will present a challenge to Wal-Mart and others already in the country's online market (French retailer Auchan is one).

However, like so much of the rest of the country's economy, the potential could be worth the hard work.