China’s Retail Market, 2011

An Expert's View about Business Environment in China

Last updated: 29 Jun 2011

Overview

•Real growth of retail sales of consumer goods moderated to 14.8% yoy in 2010; retail sales grew nominally by 16.6% yoy in the first five months of 2011
•Retail sales are primarily urban-driven; urbanities contributed to 86.5% of China’s total retail sales in 2010
•In 2010, eastern provinces and municipalities accounted for 59.9% of the national total retail sales of consumer goods; inland regions are expected to demonstrate better growth momentum in the years ahead
•The declining trend of consumer confidence index was arrested in March 2011; entrepreneur confidence index of the wholesale and retail sector was significantly higher than the national average
•Luxury sales in China registered strong growth in 2010
•Boosting domestic private consumption is a major theme of China’s 12th Five-year plan (2011-2015)


Competitive landscape

•The Top 100 retailers had around one-tenth of total market share; their sales revenue grew by 21.2% in 2010
•Most domestic retailers are region-focused
•Eyeing huge opportunities, foreign retailers continue to flock to China; nevertheless, winning in China is not an easy task
•Multi-format operation is common, especially among domestic retailers
•Franchise businesses are expanding


Latest developments

•Retailers face climbing costs
•Online retailing market continues its staggering growth
•Retailers strive to improve competitiveness
•Retailers extend their footprints to lower-tier cities and the rural market
•More active retailers’ IPO activities
•Retailer- supplier relationship continues to catch attention
•Consumption safety remains a major concern; we expect retailers in China to pay more attention to compliance and quality issues

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Posted: 28 June 2011, last updated 29 June 2011

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