Close this search box.

China unlikely to overtake US ecommerce sales in 2019 thanks to trade war

This is an archived article - we have removed images and other assets but have left the text unchanged for your reference

The trade war between the world’s two largest retail markets is taking its toll, especially on China. Coupled with a slowing domestic auto market, the trade war is hurting Chinese retail sales, especially in ecommerce.

So finds eMarketer in its latest worldwide retail forecast, where it has cut its outlook for China and the US. As a result, China will not surpass the US in total retail sales this year, as expected in our Q4 2018 forecast. That milestone will likely not happen until 2021, says the analyst.

According to eMarketer’s latest forecast, retail sales in China will grow 3.5% in 2019 to reach $5.291 trillion. That’s far below the company’s Q4 2018 forecast, which had China’s retail market growing 7.5% to $5.636 trillion this year. If the current economic climate continues, retail sales in China will surpass the US in 2021 by about $93 billion. Currently, China has a 21.1% share of the world’s retail market, while the US has a 21.9% share.

The forecast for China ecommerce sales is largely unchanged. Online retail sales will grow 27.3% to $1.935 trillion in 2019. That is by far the largest ecommerce market in the world, more than three times the size of the US ecommerce market.  China has a 54.7% share of the world’s ecommerce sales, while the US has just 16.6%.

Meanwhile, the US is not immune to the effects of retaliatory Chinese tariffs. We have reduced our outlook slightly for US retail sales from our Q1 forecast. We now expect US retail sales to grow 3.0% this year (vs. the 3.2% forecast in Q1), amounting to $5.475 trillion.

Despite the slight slowdown, the US will reach a milestone this year, as ecommerce surpasses 10% of total retail sales. Ecommerce sales will grow 14.0% to $586.92 billion.

“The US-China trade turmoil is even more of a concern for China now that domestic demand impacted one of the country’s largest sectors: auto,” says eMarketer forecasting director Monica Peart. “Other sectors such as manufacturing and construction still show strong growth. But with two simultaneous market challenges, retail sales may struggle to achieve the national growth target of 6.0% to 6.5% for the year.”

Slowing auto sales are the main drag on the Chinese economy. The automotive industry, which includes auto parts, represents about 14% of China’s retail sales.  Domestic auto sales have been slowing since consumer tax breaks began expiring last year. In addition, China exports a large portion of auto parts, including to the US.

Read More

Register for Newsletter

Group 4 Copy 3Created with Sketch.

Receive 3 newsletters per week

Group 3Created with Sketch.

Gain access to all Top500 research

Group 4Created with Sketch.

Personalise your experience on