E-commerce economy in China set to explode

China's e-commerce economy will grow nearly six times by 2020 as more retailers and vendors tap online shopping to lure consumers.

The e-commerce economy - including online transactions and the e-commerce related service industry and information technology infrastructure - will reach 43.8 trillion yuan (US$7.1 trillion), with the majority made up of enterprise transactions of 33 trillion yuan.

The value of online retail sales, from individual and enterprise sellers, may reach a combined 10 trillion yuan by 2020, Alibaba Group Research Center said in a report yesterday.

Though e-commerce retail only accounted for 6 percent of China's overall economy in 2012, the figure is seen to reach 16 percent by 2020 due to its huge growth potential as vendors move to the virtual world to lure shoppers, the report said.

Last year, Alibaba Group's retail arm Taobao and Tmall recorded more than 1 trillion yuan of sales, 10 times their transaction size in 2008.

China is set to become the world's largest online market whose size may exceed US$420 billion and rise to US$650 billion annually by 2020, McKinsey&Co said in a report in March this year.

China is home to the world's largest Internet user base of over 560 million and a younger generation of consumers who shop by clicking their mouse.