Retail Sales in Asia-Pacific Will Increase 7.7% this Year

Ecommerce will represent 14.7% of total retail sales in the region

August 11, 2017

Retail sales in Asia-Pacific will reach $9.254 trillion by the end of this year, with a growth rate of 7.7%. Gains are expected to be steady throughout the forecast period, mainly driven by increases from China. 

eMarketer’s projection has been adjusted downward since its previous forecast in December 2016 due to weak exchange rates in Asia-Pacific relative to the US dollar.

eMarketer includes sales across all retail channels in its estimates for total retail sales. This includes sales from ecommerce retailers and transactions that occur over consumer-to-consumer (C2C) platforms such as eBay and other auction sites; and sales by motor vehicle and parts dealers and by gas stations. Travel, event ticket and restaurant sales are excluded from eMarketer’s forecast.

According to eMarketer’s latest report, “Asia-Pacific Retail and Ecommerce Sales: eMarketer's Estimates for 2016–2021,” China, the world’s largest retail market, will generate $4.910 trillion in total retail sales in 2017, representing 53.1% of sales in Asia-Pacific. By 2021, those figures will rise to $6.514 trillion and 55.1%. (Subscribers to eMarketer PRO can access the report here. Nonsubscribers can purchase the report here.)

Japan and India will post $1.283 trillion and $1.033 trillion in retail sales, respectively, this year. Together, this will account for one-quarter of retail sales in Asia-Pacific. While slumping consumer spending in Japan will lead to stagnant growth for that country throughout the forecast, retail sales in India will jump to $1.691 trillion by 2021.

Ecommerce is an increasingly large factor in overall retail sales for Asia-Pacific as buyers continue to increase their spending online. Retail ecommerce sales—which include products and services (except travel, restaurant and event ticket sales) ordered on the internet via any device—will total $1.365 trillion in 2017, up 29.6% over 2016. Ecommerce will account for 14.7% of total retail sales in Asia-Pacific this year, and will climb to 25.4% by 2021.

China will make up 83.0% of retail ecommerce sales in Asia-Pacific in 2017, with purchases reaching $1.132 trillion. By 2021, that total will more than double to $2.660 trillion. Japan will represent the second largest ecommerce market in the region, ringing up $95.33 billion in sales this year. However, the segment will be limited by the country’s economic woes. India and Indonesia will experience high retail ecommerce sales growth this year, but these markets’ overall impact on sales share will be minor.

Though the assortment of ecommerce platforms available differs markedly from country to country, Alibaba is the prominent player in Asia-Pacific. The China-based company operates several homegrown ecommerce marketplaces, including China’s largest platform, Tmall. In 2016, Alibaba began to insert itself across the region, acquiring a majority stake in key Southeast Asia ecommerce marketplace Lazada. Alibaba’s expansion continued in March 2017, when it took a controlling share of India-based ecommerce platform Paytm Mall.

One motivator of these investments has been the growing presence of US-based retail giant Amazon, which continues to expand its global reach. This competition has largely been beneficial to Asia-Pacific. As multinational companies consolidate local ecommerce platforms, they have sought to improve deliverability by investing in shipping centers across geographically diverse regions. The presence of these centers may encourage shoppers to make digital purchases on these large ecommerce platforms more often. Compared with local retailers, Amazon or Alibaba offer a wider array of products and can nearly guarantee product delivery.

Photo by Hannah Morgan on Unsplash