China's e-tail revolution: Online shopping as a catalyst for growth

The ability to spend online is allowing Chinese consumers to spend more. New research from the McKinsey Global Institute analyzes spending patterns across 266 Chinese cities and finds that online shopping is already driving an incremental increase in private consumption. MGI examines a potential scenario in which e-tailing creates a profound “leapfrog” in China’s retail development, accelerating modernization and the availability of products without the need to build out extensive networks of brick-and-mortar stores. E-tailing is only one of many drivers that will contribute to China’s new model for economic growth, but it assumes larger significance as a new source of comparative advantage in the world. The report offers unique insight into the growth and impact of Chinese e-tailing, drawing on data from Alibaba Group Research Center and Taobao UED User Research, both of which are part of Alibaba Group, as well as McKinsey’s proprietary Insights China database.