China tops list of best developing markets for e-commerce growth

NEW YORK -- Large emerging markets with an active online user base and solid infrastructure offer retailers the greatest e-commerce potential in the near-term, according to a new study by A.T. Kearney’s Global Consumer Institute. The study ranks the 10 countries with the greatest potential for e-commerce growth, and China tops the list, followed by Brazil (#2), Russia (#3), Chile (#4) and Mexico (#5).

“Online retail in developing markets presents retailers with attractive growth prospects, either by adding e-commerce to already existing store networks or as a market-entry vehicle. Entry via the online channel allows retailers to build their brands and learn about consumers without having to invest in store openings,” said Hana Ben-Shabat, A.T. Kearney partner and co-leader of the 2012 Retail e-Commerce Index.

China’s current online retail market size of $23 billion is second only to the United States and is predicted to explode over the next five years, growing at a rate of 29% annually a year as Chinese infrastructure and online purchasing behaviors evolve, according to the study. While many retail sectors are popular among Chinese online shoppers, consumer electronics and apparel are the two largest categories.

Number two on the index is Brazil, whose active online user base commands US$ 10.6 billion in online retail sales, the largest in Latin America. Brazil’s online market is predicted to expand by 12% annually over the next five years as online shopping becomes more mainstream across most retail categories.

Appliances and consumer electronics are the products most commonly sold online in Brazil. Online apparel sales are marginal, as the fashion-savvy Brazilian consumer values the social experience that comes with in-store shopping.

The index examines the top 30 countries in the 2012 A.T. Kearney Global Retail Development Index, and ranks the top 10 based on the retail e-commerce potential. Read the full 2012 A.T. Kearney Retail e-Commerce Report.