Retail System

An Expert's View about Distribution Networks in China

Last updated: 22 Feb 2011

1-3 Retail System

As the Chinese economy continues to surge ahead, the consumption power of the cities is rising steadily and retail is making up an increasingly larger share of the commercial distribution sector. In particular, the rapid expansion of large-scale supermarkets and hypermarkets in recent years underlines the growing importance of the retail sector.
China is a vast country with an unbalanced development of regional economy and diverse consumer preferences. Its retail markets in different regions differ significantly from one another. The hierarchy of retailers differs from city to city depending on its level of economic development. In economically more developed cities that command greater reach, the retail market can be divided into four tiers:

•National commercial districts -- featuring large department stores, supermarkets and specialised stores;

•Regional commercial districts -- mostly located near residential areas featuring large general merchandise stores;

•Community commercial districts -- featuring super- markets offering primarily food products and daily necessities;

•Residential districts -- featuring convenience stores and small retail outlets.
In second-tier cities with a relatively high level of consumption and economic development, the retail market can be divided into three tiers:

•Central commercial districts -- housing large department stores, different types of specialised stores and boutiques;

•Regional commercial districts;

•Community commercial districts.

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Posted: 21 February 2011, last updated 22 February 2011

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