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McKinsey Global Institute on China’s Digitization

A report from the McKinsey Global Institute takes an in-depth look at the forces driving digitization in China. Digital China: Powering the Economy to Global Competitiveness “assesses the strengths of China’s digital system, the degree of digitization of industries, and the scope for value shift and creation.”

Ecommerce is a major piece of China’s digitization: as the McKinsey report indicates, China accounts for more than 40 percent of the value of worldwide ecommerce transactions. That growth came at a fast clip; a decade ago, McKinsey points out, China’s ecommerce stacked up to only 1 percent of the global market. “China also has become a major global force in mobile payments with 11 times the transaction value of the United States,” according to the report.

The report projects continued growth for ecommerce” as online sales penetrate further into rural areas, into smaller cities, and across borders.” McKinsey highlights three other trends that transforming this sector: “the continued evolution of an integrated omnichannel experience for consumers mixing offline and online, a transition toward data-driven business models, and a possible move upstream by digital platforms.”

Ecommerce is just one topic that the report addresses; it also points to ways that the young Chinese market is embracing digitization; the digital ecosystem that Baidu, Alibaba, Tencent and others are constructing; and the role of government policymakers.

To read the full report, click here.

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