China's growing dominance on a lot of things has been seen to also extend to the global online market by 2020, according to McKinsey & Co, a global management consulting firm.

China's Internet users, now more than 500 million people and still growing, will drive up the country's online sales to reach between $US420 billion and $US650 billion seven years from now.

"China is poised to become the world's largest e-tailing market," McKinsey said, noting once the second-largest economy hits the forecast figure, it is already equivalent to the current combined sizes of the U.S., Japanese, British, German and French markets.

In 2012, China's online retail sales was forecast to have reached an estimated $US190 billion to $US210 billion, from $US120 billion the previous year, the McKinsey report said.

Data from the government-run China Internet Network Information Center showed that as of end 2012, China currently has a total of 564 million Internet users, which was actually a jump of 10 per cent versus a year ago.

Although China censures and strongly regulates the activities of its netizens, it somehow just allowed its e-commerce to progress without much interference.

The report urged Chinese businesses it may consider "foregoing the national expansion of physical stores commonly seen in Western nations and move directly to a more digital retail environment," the report predicted.

But for this to materialise, it advised the federal government to expand broadband Internet infrastructure, support investment in logistics as well as encourage innovation in technology to nurture a better environment for online sales.

Of the total Chinese consumer transactions, five to six per cent come from online retail sales, almost parallel or slightly higher than the five per cent in the United States, the report added.

The United States had an estimated online retail sales of $US220 billion to $US230 billion in 2012.