Abstract

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With the most Internet users of any country, China is the world’s largest and fastest-growing e-commerce market. Capitalizing on opportunities, however, is becoming harder for consumer-facing companies as e-commerce penetration rates plateau in high-tier cities and as digital attackers, especially in the online-to-offline space, cut into incumbents’ margins.

According to McKinsey’s latest survey of China’s Internet users, promising sources of e-commerce growth are emerging. The research points to areas with major growth potential: the uptake of online shopping among consumers in low-tier cities, e-commerce penetration beyond first-mover product categories such as apparel, purchases initiated from social media platforms, and the use of cross-border shopping to supplement domestic channels.​