China’s retail market is one of the most rapidly expanding retail markets in the world. The country’s emerging middle class and high growth rate have fuelled rapid expansion in the retail sector. The country is home to approximately 725 million middle-class consumers and is expected to have a total population of over 24.7 million middle classes by 2020. The country is also expected to have a total population of over 1 billion consumers with a middle-class income by 2025. China’s retail market is forecast to grow at a CAGR of 9.9% from 2016 to 2020. This post will provide you with insights into the retail market in China and the future of retail in China.
What is the retail market in China?
Retail is the sale of a wide range of products to consumers. It is one of the most important sectors in China’s economy, accounting for 17.9% of China’s GDP in 2017. It is also one of the most dynamic sectors in the Chinese economy. According to Euromonitor, retail sales accounted for 65% of China’s economic growth in 2017. China’s retail market is forecast to grow at a CAGR of 9.9% from 2016 to 2020. The market size of the retail industry in China is relatively small compared to other countries. However, with the high growth rate, rising income, and increasing consumption, the market is expected to have a significant growth rate in the coming years.
The retail market size in China
In 2017, the retail market in China was estimated to be RMB 3.6 trillion ($555 billion) with a CAGR of 9.9%. The market is growing rapidly and is expected to reach RMB 5.1 trillion by 2020. However, a large part of the country’s population and consumption are still in rural areas. This market is still in its growth stage. The consumption of Chinese consumers is expected to continue to increase, which will lead to increased spending on retail goods. The Chinese market has a very high per capita income, with 87% of the population having an annual income of over $12,000. With the increasing income, Chinese consumers are expanding their consumption outside their immediate circle.
Future of retail in China
The retail market in China is expected to continue growing over the forecast period. This growth is due to the increasing income and rising consumption of middle-class consumers. With the implementation of the “Made in China 2025” strategy, the transformation of the Chinese manufacturing industry also led to the transformation of the consumer goods industry. The expansion of eCommerce in China has been supported by the “Internet Plus” policy, which encourages the operators to invest in the expansion of internet access and eCommerce. With the new policy, larger stores are becoming the norm, which will lead to a transformation of the shopping culture in China. The high growth rate of the retail sector is expected to be driven by the transformation of the consumer goods industry, expansion of eCommerce, and the implementation of the “Made in China 2025” strategy.
Supermarkets and Hypermarkets
Supermarkets, or hypermarkets, are the largest type of retail store in China. They mainly sell packaged food such as rice, grain, and flour, as well as fresh vegetables and fruit. In our research, we found that supermarkets have a very large share in the retail market in China. Supermarkets and hypermarkets are also referred to as hypermarkets in China. The largest Chinese supermarket operator, which is also the largest retail company, is Wal-Mart Stores. Supermarkets and hypermarkets are widespread in rural areas, where people have a low income and limited access to food.
Mainstream retailers
Mainstream retailers are those retail organizations that have a large share in the Chinese market. The retail market in China is dominated by three major retailers: Wal-Mart Stores, Carrefour, and Tesco. Mainstream retailers are also referred to as traditional or big-box retailers.
B2C eCommerce Platforms
Online retail is booming in China. The country has the largest number of internet users in the world. The Chinese government has been encouraging digitalization, with the aim of promoting digitalization in all sectors. Due to this policy, eCommerce in China has been growing rapidly. Alibaba Group is the largest eCommerce company in China. We found that B2C eCommerce platforms are another trend following the Chinese retail market. Consumers in China can use B2C eCommerce platforms to buy branded clothing, electronics, furniture, and other household goods.
Other Trends Following from the China Retail Market
From 2017 to 2020, the retail market in China is expected to be driven by the transformation of the consumer goods industry, expansion of eCommerce, and the implementation of the “Made in China 2025” strategy. Online retail is likely to become the mainstream retail channel. The Chinese eCommerce market is expected to reach a value of RMB 520 billion in 2020. It is also expected that Chinese consumers will increase their spending on travel and activities, which will lead to a growth in the travel and tourism market as well.
Bottom line
The Chinese retail market is one of the fastest-growing retail markets in the world. Over the next five years, it is expected to have significant growth. The retail market in China is dominated by supermarkets and hypermarkets. With the implementation of the “Made in China 2025” strategy, the transformation of the consumer goods industry has led to the transformation of the retail sector in the country. The retail market in China is expected to be driven by the transformation of the consumer goods industry, expansion of eCommerce, and the implementation of the “Made in China 2025” strategy. Over the next five years, the Chinese retail market is expected to have significant growth.
