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China Retail Report Q2 2009Published by: Business Monitor International Published: Apr. 24, 2009 - 41 Pages Table of Contents
AbstractThe new BMI China Retail report predicts that the country’s total retail sales are expected to treble by 2013, growing from CNY8.9trn (US$1.22trn) in 2007 to CNY25.2trn (US$3.68trn) by the end of the forecast period. Retail sales broke through CNY10trn (US$1.5trn) for the first time in 2008, according to the Ministry of Commerce. Strong underlying economic trends, population growth and the increasing wealth of individuals are key factors behind retail market expansion. Regulatory reform following China’s accession to the WTO in 2001 has allowed foreign retailers to make significant inroads into the market, contributing to forecast annual retail sales growth of 21%. China’s nominal GDP was US$3.25trnn in 2007. Average annual GDP growth of 8.7% is predicted by BMI to 2013. With the population increasing from 1.34bn in 2007 to an estimated 1.4bn by 2013, GDP per capita is predicted to more than double by the end of the forecast period, reaching US$6,324. Our assumption of consumer spending per capita is for an increase from US$921 in 2007 to US$2,700 by 2013.The growth in the overall retail market will be driven, in large part, by a growing urban population with high disposable incomes and an interest in aspirational purchasing. According to Global Demographics, more than 30% of all urban households in China had yearly incomes in excess of CNY40,000 (US$5,848) in 2007. The National Bureau of Statistics (NBS) forecasts that urban retail sales will account for nearly 70% of total retail sales in 2008. A sizeable multinational retail presence following the lifting of foreign direct investment (FDI) restrictions in 2001 has ensured the early adoption of modern retail best practices in China, with ‘organised retail’ - i.e. Western-style chain outlets, department stores, supermarkets, etc. - already accounting for an estimated 20% of the total retail market, far higher than India’s 5%. Chinese retailers have also been expanding into secondary and tertiary cities. By the middle of 2008, Gome Electrical Appliances Holding, China’s leading retailer of household appliances and consumer electronic products, had 305 outlets in 171 second-tier cities, representing more than one-third of its total number of stores and generating more than 20% of its total sales. Partnerships between local players and multinationals are also allowing for rapid development of the retail market. In November 2007, Beijing Hualian Group signed a joint venture (JV) agreement with Costa, the UK-based coffee company, to open 300 Costa stores in Beijing, Tianjin, Hebei, north-east China and other regions in the next few years. Retail sales for the BMI universe of Asian countries in 2007 were an estimated US$1,654.3bn. China and India alone in 2007 accounted for an estimated 92% of regional retail sales, with their combined share expected to reach almost 95% by 2013. Growth in regional retail sales for the period 2007 to 2013 is put by BMI at 181%, or an annual average 19.3%. China should experience the most rapid rate of growth, followed by India and Indonesia. For China, the estimated 2007 market share of 73.8% is expected to rise to 79.3% by 2013. Get Full Details About This Report >> |
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