Report points to growth in online industrial orders

The penetration rate of online procurement for industrial goods is expected to rise to 5 percent by 2025, from about 2 percent currently, with total online transaction volume at 2.3 trillion yuan (US$333 billion), according to a joint report by Bain & Co and Alibaba's business-to-business trading platform 1688.com.

The transaction size of industrial products, including machinery, manufacturing facilities, maintenance tools and repair parts, has enjoyed 30 percent annual compound growth on 1688.com since 2015, and the total value was estimated at 700 billion yuan last year.

"Industrial goods will see new online growth opportunities in the next few years, although the focus has been digital retailing in the past two decades, and digital platforms will play a more important role for industrial companies in terms of boosting performance for procurement as well as sales departments," said Raymond Tsang, global partner and Asia head of performance improvement practice at Bain & Co.

Chemical materials will represent a majority of online transactions, the report estimates. Maintenance, repairs and operating supplies, along with electrical facilities and mechanical parts are also major categories for online sales.