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.
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Contact:
Ken Research
Ankur Gupta, Head Marketing &
Communications
+91-124-4230204
