McKinsey report shines light on online-to-offline services

As world's largest and fast-growing e-commerce market, China is expecting the potential growth of the online-to-offline services, which are cutting into incumbents' margins, according to the latest McKinsey's survey of China's Internet users.

"Online-to-offline services can win consumers and even convince them to spend more than they might want to," said Gong Fang, a partner at McKinsey's Shanghai office.

China's online retail market is the world's largest after 2015 sales grew to approximately $630 billion, nearly 80 percent bigger than that of the US. E-commerce in China accounts for 13.5 percent of all retail spending.

"In an e-commerce market as large and fast as China's, retailers and consumers will have no shortage of opportunities, especially in low-tier cities where online and e-commerce penetration remains relatively low," said Alau Lau, senior partner and head of McKinsey Digital in Asia.