China Surpassed US as Largest Ecommerce Retail Market: Ken Research

Ken Research announced its latest publication on, “Retailing in China-Market Summary & Forecasts”, offer insights on the changing trends and key issues within the China’s Retail Market. The publication includes an insightful analysis of changing consumer behavior, changing economic and demographic factors, technology innovations, leading domestic and international players, distribution channels and regulatory framework within which China’s Retail Market operates. The aforementioned analysis has been done for 26 products across 12 products categories in the retail market.
China’s Retail Market is the world’s second largest retail market. In 2013 China overtook the US as the largest e-commerce market in the world and is expected to again overtake the US as the world’s largest overall retail market by 2018 with Chinese spending to be accounting for one-quarter of the global retail market within a decade.
Mapping the China’s Retail Market Landscape












Global recession has slowed down the growth in China’s retail market. However the rapid evolution of China’s economy into a consumption-driven economy still provides for enormous growth opportunities in the retail sector. Increasing population with rising middle class, changing lifestyle, retailers spreading to second and third tier cities, market supporting govt. policies and online shopping takes off are expected to be the key factors boosting demand in the China’s retail market.
Despite the sluggish economic situation, the retail sector is expected to register a significant growth over the next five years to 2020. Various retail market products are expected to show increased sales, however at a decreasing rate.A strong affinity towards brands and increasing fashion consciousness will result in more spending on clothing and footwear. The food & grocery segment will continue to be dominated by local players and is forecast to grow at a CAGR of 11.17%, to reach an estimated value of CNY25, 982 billion in 2020. Online platform including e-commerce and m-commerce will be a key channel for retailing over the next five years.China continues to be the second the largest Duty Free market in 2020.

China is already the world’s largest e-commerce market. However, year-on-year growth in online sales in China slowed in 2013, but was still estimated at 42%. It is expected that Chinese e-commerce sales will reach US$650 billion by 2020, on account of increased mobile sales and increased internet penetration.
Key Macroeconomic Trends Driving Growth in China’s Retail Market
The growth of China’s retail market, though at a slower rate, has been possible on account of consistently improving macroeconomic conditions of China, which has led to increased demand for retail market products in one way or another. Consequently, the growth of the retail market in term of volume has shown positive but declining growth rates and is expected to continue with the same trend over the next five years.

China Economic Snapshot	2011	2012	2013	2014	2015
Population (million)	1347	1354	1361	1368	1375
GDP per capita (USD)	5575	6260	7037	7569	7808
GDP (USD bn)	7511	8476	9576	10,352	10,736
Economic Growth (GDP, annual variation in %)	9.5	7.8	7.7	7.3	6.9
Unemployment Rate	4.1	4.1	4.1	4.1	4.1
Consumption (annual variation in %)	11.0	9.1	7.3	7.8	-
Retail Sales (annual variation in %)	17.1	14.3	13.1	12.0	10.7
Inflation (PPI, annual variation in %)	6.0	-1.7	-1.9	-1.9	-5.2
No. of households earning over US$50,000 (in 000’s)	1,951	2,764	3,655	4,694	6,047

Table 2:UAE Economic Snapshot (Source: Focus-Economics. Com)
Some macroeconomic factors driving growth in China’s Retail Market include:

• Increasing population with rising middle class has increased household consumption.
• Economic growth with increasing GDP per capita has brought prosperity and a change in lifestyle of consumers.
• Consistent unemployment rates implies that every year the labor force entering that labor market is employed, hence increase in consumer base for retail market.
• of Households earning over US$ 50,000 has been increasing consistently over the years, which is driving the market for luxury items.

To know more on coverage, click on the link below:
https://www.kenresearch.com/consumer-products-and-retail/wholesale-and-retail/retailing/29891-95.html
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https://www.kenresearch.com/consumer-products-and-retail/wholesale-and-retail/future-retailing-china/21560-95.html
https://www.kenresearch.com/consumer-products-and-retail/wholesale-and-retail/food-grocery-retailing/29892-95.html
Contact:
Ken Research
Ankur Gupta, Head Marketing & Communications
+91-124-4230204

Urbanization to Gear up China Food and Grocery Retail Sector : Ken Research

The research title “Food and Grocery Retailing in China-Market Summary & Forecasts" is a detailed sector report providing a comprehensive analysis of the emerging trends, forecasts and opportunities to 2020. Both qualitative and quantitative insights and analysis of the shifting food and grocery retail dynamics for drinks, household products, packaged food, tobacco and unpackaged food from 2010 to 2020 have been covered.

As urbanization and rising disposable incomes along with a huge population of roughly 1.4 billion, maintains to expand China’s consumer market, the country’s retail grocery market is also evolving. While traditional markets are still present in China, consumers have diminished preference for them as these markets are increasingly facing competition from modern grocery retail formats, such as hypermarkets, supermarkets and convenience stores.

Supermarkets and hypermarkets are the market dominators of some larger cities, and their continued expansion to even smaller cities is expected to further drive competition in the grocery retail sector. Of the various retail channels, hypermarkets are expected to have the most growth potential in the Chinese market followed by the convenience stores due to rising disposable incomes and consumer’s preferences for convenience and modernized lifestyles. These factors are also expected to expand the opportunities for packaged food sales in the Chinese market. Products that address other consumer concerns, such as health and food safety, may be particularly promising. Internet retailing also continues to expand its presence in the market. In-fact, online spend on food and grocery is projected to grow at a CAGR of 34.03% during 2015-20.

Source: National Bureau of Statistics of China

The consistent growth in the GDP per capita is a major factor contributing to the growth of the hypermarkets and convenience stores in China. Convenience stores offer speed of service to time-starved consumers who want to get in and out of the store quickly. These shoppersrecognize this channel of trade for its convenient locations, extended hours of operation, one-stop shopping, variety of merchandise and fast transactions. Despite small operating areas, the product range is still quite broad.

China’s food and grocery retail market is dominated by local players of the country like CRE Ltd, Walmart, RT Mart etc.

Chinese grocery sales are set to grow by a third between now and 2020, according to forecasts from the Institute of Grocery Distribution.

The Chinese grocery market has proved challenging for western supermarket chains, with Tesco failing to make it alone on the mainland despite an ambitious program of building so-called “lifestyle malls”, anchored by Tesco stores. Walmart has struggled with food safety issues in China — a market where foreign brands trade on their reputation for quality, so any safety flaws are particularly bad for brand image.

Key Macroeconomic Trends Expected to Drive Growth of China Food Retail Sector

The food and grocery retailing market in China is forecast to grow at a CAGR of 11.17%, to reach an estimated value of CNY25982 billion in 2020. Modernization of Lifestyles, Urbanization and rapid and consistent increase in the disposable incomes are some of the major factors expected to drive growth of the Chinese Food and Grocery Retail sector. Apart from these, we also have few other factors that can be associated to this growth:

·The Ministry of Commerce of China is encouraging retailers to establish direct procurement bases across China to increase traceability and supply fresh produce to local residents.

· China’s regulatory responses to food safety concerns are many. For example, the “Further Supervision of Baby Milk Formula Quality” policy in June 2013 resulted in many local milk formula manufacturers exiting the market and later applied both antitrust legislation as well as price controls on the industry. The retail sale of unpackaged oils and fats as well as bulk dry fruits and nuts is also now banned in most locations.

· The Ministry of Commerce’s scheme to introduce modern retailing to rural areas since 2006 is designed to provide those residents with high-quality products at competitive prices in clean and tidy shopping environments, in an attempt to move grocery shopping away from wet markets and small, independent outlets.

To know more on coverage, click on the link

https://www.kenresearch.com/consumer-products-and-retail/wholesale-and-retail/food-grocery-retailing/29892-95.html

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https://www.kenresearch.com/consumer-products-and-retail/wholesale-and-retail/food-grocery-retailing-australia-the-market/2535-95.html

Contact:

Ken Research

Ankur Gupta, Head Marketing & Communications

query@kenresearch.com

+91-124-4230204