Idea in Brief

The Challenge

Retailers in Europe and the United States are far behind China in digital retail.

Why It Exists

China’s large and fast-growing market not only is highly digitized but also takes advantage of the massive ecosystems of Alibaba, Tencent, and others.

The Solution

To catch up, Western retailers can take five lessons from the Chinese experience: Create single entry points, embed digital evaluation in the customer journey, don’t think of sales as isolated events, rethink the logistical fundamentals, and always stay close to the customer.

China is both a large and a fast-growing retail market—worth about $5 trillion in 2020—and highly digitized. Given that the pandemic has made digital every retailer’s strategic priority, it’s not hard to see why the Economist opened 2021 with a cover story headlined “Why Retailers Everywhere Should Look to China.”

A version of this article appeared in the September–October 2021 issue of Harvard Business Review.