DALIAN?- The volatility of the stock market in recent months has eclipsed a much more subtle transition that has geared China's economic growth toward consumption.

The market correction in China has wiped out nearly 40 percent of market value of its stock markets in its plunge over the past two months, stoking fears that weakness in the world's second largest economy will put a drag on the frail recovery elsewhere.

Though China's economic growth slowed to a six year low of 7 percent in H1, retail sales have held up relatively well at 10.4 percent. Meanwhile, online retailing has witnessed even higher growth of 39.1 percent during the same period.

Much of the resilience of retail consumption has come as a result of the internet, which are likely to play a part in half of the country's total consumption in the future from nearly 10 percent now, according to Rich Lesser, CEO of management consultants Boston Consulting Group.

Speaking at a discussion on Wednesday at the annual summer meeting of the World Economic Forum in the northeastern Chinese coastal city of Dalian, Lesser said the stock market's impact on the Chinese economy is overstated and the shift in growth drivers toward consumption is a much more noteworthy trend.

Wang Jianzhou, chairman of China Association for Public Companies who used to head China Mobile, the world's largest telecom firm by subscribers, said the rise of mobile internet has profound implications for businesses in China.

China is already the world largest smartphone market, where smartphone handsets are becoming increasingly affordable as Chinese manufacturers markers like Xiaomi, Huawei and Lenovo are fighting to capture more consumers with 4G smartphones selling at less than 200 dollars.

Chinese smartphone users are using their phones to do everything from shopping to hailing taxis and ordering takeouts in a trend launched by internet giants Alibaba, Tencent and Baidu to deliver better services through mobile internet.

"What we are watching right now is a transition of the economy to more consumption, more services and less dependency on investment," Lesser said.

"In most parts of the world," he said, "the service environment has developed over many decades and the online players are challenging a very established, very embedded offline retail infrastructure. But what sets China apart is that consumption is growing in a highly innovative online world almost in parallel with the growth in offline services."

Many of the changes brought by internet firms are disruptive to traditional retailers and other industries in the way they do business and make profits. Companies are at risk of becoming irrelevant if they fail to adapt to an increasingly mobile world.

Telecom veteran Wang said the innovations in China's online world are creating a wave of new demand and redefining the entire telecom industry.

Revenue from telecommunications is being surpassed by that of mobile phone manufacturing, which will in turn be topped by revenues grossed from internet-based services.

But whether traditional players who used to hold dominance in China's retail scene can thrive in the shift to mobile consumption is just as uncertain as betting on the country's volatile stock market.

That, according to Lesser, is what China and companies doing business here, both domestic and foreign, should expect as authorities want the market to play a more decisive role in the economy.