Shanghai has topped the online shopping market in China in terms of purchases and sales turnover, according to an industry report.

The city's residents spent 17.42 billion yuan (US$2.56 billion) online in the year ended May 1, accounting for 8.67 percent of the total online trade and ranked No. 1, according to the report compiled by Taobao.com, the biggest online business platform in China.

They were also China's biggest online sellers as local online shops sold the most products in value in the period, equivalent to 12.05 percent of the total online trade in the country, the report released yesterday said.

Shanghai has 19.21 million permanent residents based on official population data. That meant each local citizen spent 906 yuan annually in shopping online.

"An increasing number of online buyers turned into sellers at the same time while many sellers like to shop online as well. As a result, the cities with strong online purchasing power usually have a larger number of online shops and more trading activities," Taobao.com said in the report.

Among the top 10 biggest traders were all first- and second-tier cities in China, including Beijing, Shenzhen, Guangzhou and Hangzhou.

But the report also noted lower-tier cities in the country's western areas have substantial growth potential in the online shopping market.