China has been ranked as the developing market with the most e-commerce potential, according to a report released today (27 June).

The study by AT Kearney found that large emerging markets with an active online user base and and solid infrastructure offer retailers the greatest e-commerce potential in the near-term.

China came first in the ranking, with its current online retail market valued at US$23bn, making it second only to the US.

China is predicted to explode over the next five years, growing at 29% a year as its infrastructure and online purchasing evolve. Consumer electronics and apparel are the two largest categories in the country.

Brazil came second, with its active online user base commanding US$10.6m in online retail sales, the largest in Latin America. Its online market is predicted to expand 12% a year over the next five years as online shopping becomes more mainstream across most retail categories.

However, online apparel sales remain marginal as Brazilian consumers value the social experience that comes with in-store shopping.

Russia is ranked third, driven by a large online user base and a significant online retail market. The country has 60m internet users, the largest online population in Europe, and 15m online shoppers. The online market is currently valued at US$9.1bn, and is projected to grow 12% a year over the next five years.

"Online retail in developing markets presents retailers with attractive growth prospects either by adding e-commerce to already existing store networks or as a market-entry vehicle," said AT Kearney partner and study co-leader Hana Ben-Shabat.

"Entry via the online channel allows retailers to build their brands and learn about consumers without having to invest in store openings."

Chile, Mexico, the United Arab Emirates, Malaysia, Uruguay, Turkey and Oman round out the top 10.