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China Retail Report Q3 2009Published by: Business Monitor International Published: Jun. 15, 2009 - 49 Pages Table of Contents
AbstractThe Q309 BMI China Retail report predicts that the country’s total retail sales are expected to more than double by 2013, growing from CNY8.9trn (US$1.22trn) in 2007 to CNY19.4trn (US$3.2trn) 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$3.82trn in 2008. Average annual GDP growth of 7.4% is predicted by BMI to 2013. With the population increasing from 1.35bn in 2008 to an estimated 1.40bn by 2013, GDP per capita is predicted to grow 58.2% by the end of the forecast period, reaching US$4,492. Our assumption of consumer spending per capita is for an increase from US$1,161 in 2008 to US$2,650 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 have accounted 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 2008 were an estimated US$2.04trn. China and India alone in 2008 accounted for almost 93% of regional retail sales, with their combined share expected to reach 94% by 2013. Growth in regional retail sales for the period 2008 to 2013 is put by BMI at 105%, or an annual average 17.6%. China should experience the most rapid rate of growth, followed by Indonesia and India. For China, the estimated 2008 market share of 75.3% is expected to rise to 77.1% by 2013. Get Full Details About This Report >> |
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