Online shopping in rural areas grows by 39%, helping boost overall e-retail sales by 32% over 2016.

Chinese consumers moved more of their shopping online in 2017, sending e-retail sales past $1 trillion for the first time in the world’s leading e-commerce market.

Retail web sales totaled 7.18 trillion yuan ($1.149 trillion) in 2017, an increase of 32% from 5.43 billion yuan ($869 billion) in 2016, according to China’s Ministry of Commerce. E-commerce growth accelerated past the 30% mark in 2016, after slumping to 26% in 2016 from 33% in 2015.

China far outpaces the United States, the second-largest e-retail market in the world, in both sales and growth. While the U.S. Department of Commerce will not release its 2017 estimate of online retail sales until later this month, Internet Retailer estimates U.S. e-commerce growth of about 15% in 2017 to approximately $455 billion.

A big part of the increase in online shopping in China came from consumers living outside of China’s big cities. Those shoppers increased their online purchases by 39% in 2017 to 1.245 billion yuan ($199 billion), representing more than 17% of total web purchases.

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Online sales of tangible goods, from clothes to paper towels, increased 28% to 5.48 trillion yuan ($877 billion), accounting for 15% of retail sales of physical goods, the Ministry of Commerce reported. That is up from e-commerce accounting for 12.6% of retail sales of physical goods in China in 2016. Sales of such digital items as games, videos and music accounted for the remaining 1.7 billion yuan ($272 billion)

Total retail sales in China increased 4.6% in 2017, a modest uptick from nearly 4.5% in retail growth in 2016, the Ministry of Commerce says.

Hot areas of e-retail growth in 2017, according to the Ministry of Commerce, included cross-border e-commerce, in which Chinese shoppers buy from foreign websites; purchases in unmanned physical stores where consumers use online payment systems like Alipay and Tenpay to pay with their mobile devices; and sales of used goods online. In some particularly high-growth categories, such as sales of high-end household appliances, fresh food and health products, year-over-year growth exceeded 70% in 2017, the Ministry of Commerce says.

Retailers that operate brick-and-mortar stores, including such national retail chains as Suning Appliance Co. Ltd. and Gome Electrical Appliances Holding Ltd., increased their online sales by 26.8% in 2017, 3.2% more than in 2016. However, the Ministry of Commerce did not provide a sales figure for those stores. Suning is No. 2 in the Internet Retailer China 500 and Gome No. 5.

The government report highlighted how big a business online retailing has become in China’s smaller cities, towns and villages. Outside of big cities, the Ministry of Commerce says, there are 9.86 million individual online merchants, an increase of 20.7% from a year earlier. That no doubt includes many of the millions of individuals and small businesses that sell on the online marketplaces that dominate e-commerce in China, notably the Taobao shopping portal of Alibaba Group Holding Ltd. and JD.com Inc.’s big e-retail website.

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The report also says there are now 28 million workers in rural areas employed by e-commerce businesses, which likely reflects the big expansion of warehouses and smaller pickup facilities by Alibaba and JD.com as they compete to provide fast delivery of online orders even to remote areas of China.

JD.com which, like Amazon.com Inc. in the United States, both sells its own merchandise and hosts outside merchants on its e-commerce site, is No. 1 in the China 500. Walmart Inc. owns about 10% of JD.com. Alibaba is not ranked because it, like eBay Inc, operates pure marketplaces and does not own any of the merchandise sold on its site. Amazon is No. 1 in the Internet Retailer Top 1000 ranking of North America’s leading online retailers and its China e-commerce site, Amazon.cn, is No. 4 in the China 500.