Mobile Payments Helps Drive China to Top of the Retail Sales Heap
The last several years have involved a whole lot of back-and-forth between the United States and China, including a newly-minted trade war whose effects are not yet fully known. One point, however, can now be fully told, according to a report sent from eMarketer: China’s retail sales will officially pass those of the United States by the end of 2019, and by better than $100 billion dollars.
China is set for a year of impressive growth, as its retail sales are set to leap 7.5 percent to hit $5.636 trillion. The United States will also see growth, the eMarketer report notes, but it will only see 3.3 percent growth to hit a combined total of $5.529 trillion in spending. It’s interesting to note here that both countries will see growth slow, but China’s will slow just a little less, to the point where it exceeds that of the United States through 2022.
One of the biggest forces behind this is mobile payments, and by extension, ecommerce. The Chinese represent 55 cents of every dollar sold online in the world. Despite this massive number, ecommerce accounts for just 35.3 percent of all retail sales. The United States only involves online shopping in 10.9 percent of all its retail sales. The Chinese, however, will continue growing to the point where it represents 63 percent of all online shopping.
While China’s middle class has been expanding rapidly, which contributes to these gains, it’s worth noting that China has approaching five times the population of the United States, at 1.4 billion as compared to the US’ 324 million. So for China to outspend the US at some point really isn’t outlandish; they’ve got a lot more wallets chipping in. So even if each of them only spends a quarter of what we do, they still outspend us. Also consider issues of price inflation recently seen at the grocery store and the like, and that may also contribute.
Regardless of the ultimate cause, it’s still a blow. American consumers have been top of the heap for a very long time, and now, they’re poised to be second place. That may not be such a bad thing, though; just ask anyone who’s paying off a Christmas credit card bill right now.