China’s next chapter: The e-tailing opportunity

| Interview

Almost overnight, China has become the world’s second-largest e-tailing market, with 2012 revenue estimates as high as $210 billion and a compound annual growth rate of 120 percent since 2003. The country’s retail sector already is among the most wired anywhere—e-tailing commanded about 5 to 6 percent of total retail sales in 2012, compared with 5 percent in the United States. But Chinese e-tailing is distinctly different from that of other countries: only a small portion of it takes place directly between consumers and retailers, whether online pure plays or brick-and-mortar retailers on their own Web sites. Instead, most of it occurs on sprawling e-commerce platforms that are not just replacing traditional retail transactions but also stimulating consumption that would not otherwise take place. 

In this video, McKinsey’s Yougang Chen and Gordon Orr break down the ways China’s e-tailing phenomenon is causing companies to rethink how they serve Chinese consumers and examine the ways this vibrant digital ecosystem could offer a glimpse of the country’s future competitive advantage.