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"Chinese brands have performed exceptionally well in certain categories like fresh dairy, and their agility in responding to market demands can lead the 'premiumization' trend in the future," said Jason Yu, general manager of Kantar Worldpanel in China.

"Competition among online retailers will concentrate on new technologies, logistics networks and supply chains. E-commerce players should expand their offline consumption offerings and apply more cutting-edge technologies," Cao said.

"Creating employment opportunities is one aspect of upholding CSR (corporate social responsibility). All Chinese companies are also creating win-win outcomes by transferring technology, contributing to communities and cooperating with local government," he said.

"China's economy is expected to post steady growth in 2018 thanks to the continuing structural reforms, simplification of administrative procedures, and implementation of an innovation strategy, but potential risks in the economy should also be monitored," Yi said.

"Chinese consumers are trading up to higher-quality products," Jeff Walters, BCG managing director and co-author of the report said. "Digital technology is one of the underlying drivers that will continue to spur purchases."