China Is the World’s Retail Laboratory

The internet boom reached China late, but the country’s consumers have adapted to life online more rapidly and thoroughly than those anywhere else. E-commerce sales soared past $1 trillion last year, the highest anywhere in the world. Here groceries can be delivered to your home within the hour, and street vendors prefer mobile payment over cash.

China has fewer malls and stores than the U.S., but even these have seen sales slump as consumers prefer to venture outside for experiences, not shopping. In a sign of e-commerce’s dominance over brick-and-mortar retail, internet giant Alibaba Group Holding Ltd., which runs the biggest e-commerce platform in the world, last year paid about $6 billion to take control of China’s top supermarket chain and one of its biggest department-store franchises. Its goal, according to Vey-Sern Ling, senior internet analyst at Bloomberg Intelligence, is to have “control over more and more data on customers,” whether they’re shopping in stores or online. “Going into offline areas allows them to expand their addressable market beyond 800 million internet users to possibly every person in China,” Ling says.