China's online retail sales are expected to rise to 10 trillion yuan ($1.6 trillion) in 2020 with the penetration rate doubling from the 2014 level to 22 percent, according to a report unveiled on Monday by Bain&Company and Alibaba.

Business to customer, mobile Internet commerce and trans-border Internet commerce will be the main growth engines, the report said.

The report said Chinese consumers' awareness of brands has been growing in the last several years.

Ding Jie, a partner at Bain&Company, said Internet commerce helped the brands accommodate segmented demands and reach the market in third and four-tier Chinese cities.

In this transformation, companies should build digitalized operation models and understand digitalization's impact on research and development, supply chain and sales, Han Weiwen, a partner at Bain&Company said.