Chinese consumers have turned China into the world's largest online retail market, with a report released on Monday showing China's online retail sales accounted for about 40 percent of the entire global market in 2016.

The report, released by the Chinese Ministry of Commerce, suggested China had 731 million Internet users and 467 million online shoppers in 2016. 441 million of those were mobile shoppers, meaning that just over 60 percent of China's entire Internet population purchase online via mobile.

The transaction value of China's online retail sales reached 26.1 trillion yuan (3.8 trillion US dollars) in 2016, growing 19.8 percent year-on-year, the report stated. This amount maintained China's place at number one, as its transaction value accounted for 39.2 percent of the global online retail market.

In terms of goods sold, the most popular categories of sale items were clothes, home improvement, home appliances, digital and phone, food and beverage, and mom and baby products.

Meanwhile, China's online retail sales of services realized a new breakthrough in 2016, with revenue reaching 2.45 trillion yuan (357.5 billion US dollars) at a year-on-year increase rate of 23.7 percent, according to the report.

The scale of services derived from e-commerce - for example web design, financial training and data services - also boomed to 1.1 trillion yuan (160.5 billion US dollars), the report said. The market size of electronic payment services, logistics services and electronic authentication grew to 950 billion yuan (138.6 billion US dollars).

As it enters a period of stable growth, China's e-commerce industry faces challenges like a slowdown in the growth of new Internet users, the incomplete combination of online and offline sectors, as well as unsolved problems in cross-border and rural e-commerce markets.