Online sales for physical goods accounted for 12.4% of retail sales in China.

China is lapping the U.S. in online retail sales.

In the first quarter, Chinese consumers purchased 1404.5 billion yuan ($204.1 billion) worth of goods online, according to the National Bureau of Statistics of China, more than double the $98.1 billion in U.S. online retail sales. China’s online retail sales grew 32.1% in the first quarter from 1063.2 billion yuan ($154.5 billion) in the same quarter a year ago.

The Chinese and U.S. government figures aren’t exactly comparable because the China report includes travel services sold on retail websites like those operated by China’s two biggest e-commerce companies, Alibaba Group Holding Ltd. and Inc. However, China’s statistics agency doesn’t count sales on sites like Xiecheng, a Priceline-like online travel site. Even with that proviso, it’s clear Chinese consumers are making a lot more retail purchases online than do their U.S. counterparts.

As in the United States, consumers are shifting more of their purchases to the web from stores, although in China even stores are seeing substantial growth. Total retail sales grew 10% in the first quarter to 8582.3 billion yuan ($1245.5 billion) from 7802.1 billion yuan ($1132.4 billion).


Driving retail sales growth are middle-class Chinese consumers upgrading their possessions in a variety of categories. Among the key areas of overall retail growth were entertainment & office supplies with 14.8% growth, telecommunication gear (11.0%), sporting goods (17.3%) and home decor (14.8%), according to the bureau.

One indicator of the growth of e-commerce is the steady uptick in the volume of packages being shipped within China. In the first quarter of 2017, Chinese shipping companies delivered 7.59 billion packages, an increase of 31.5% from the first quarter of 2016, according to the State Post Bureau of China. About 70% of those deliveries are of goods ordered online, the bureau says.

Consumers living outside of big cities, and thus with less access to the shopping centers of metropolises like Beijing and Shanghai, remain a strong driver of online growth. The National Bureau of Statistics says in the first quarter of 2017 rural residents purchased 250.43 billion yuan ($36.4 billion) online, an increase of 36.6% year over year.

“Consumers have more channels to buy. They can not only shop on a website but also order directly from other places like social media platforms,” says Zhang Zhouping, a senior analyst at the China E-commerce Research Center. “Also, Chinese consumers are buying more from cross-border e-commerce for imported goods, as it has become a much easier way to shop for premium products.”

Global brands and retailers are expanding quickly through cross-border e-commerce sales into China. For example, the value of e-commerce orders for overseas products processed by Shanghai Customs reached 360 million yuan ($52.4 million) in the first quarter of 2017, nearly double that of the same period last year, according to data recently released by Shanghai customs officials.

Shanghai’s Free Trade Zone, created in 2013, represented the first test of a Chinese government policy that made it easier for Chinese consumers to buy online from foreign websites.

Overseas brands and retailers can stage goods in a free trade zone and send through an expedited customs process when a Chinese shopper makes an online purchase. Those purchases are treated the same as items Chinese travelers bring back from abroad, and customs duties typically are lower than those charged when companies bring large quantities of merchandise into China. Similar free trade zones have since been established in 10 other Chinese cities.