Free Essay: China Retail Industry
China retail industry has rapidly grown over the years to become one of the largest globally. In terms of growth, it is one of the rapidly growing retail industries in the world as a result of the steady rise in household income in China. In fact, China retail market is currently the second largest globally, and first in Asia. According to economists and financial analysts, the retail industry in China will surpass that of the US by 2016 if it continues with the trend that it has demonstrated over the years.
In the past years, China retail market has been growing quite fast with annual expansion rates of more than ten percent. However, there was a slowed growth in 2013 when it only managed 7.7%. This is no cause for alarm since China has been consistent with this kind of growth in an effort to conduct an overhaul in order to wean the country’s economy from the dependency that it has had on export-based manufacturing, heavy industry, state-controlled investments among others for quite a long time.
The retail industry in China is currently fragmented with small independent stores commanding the largest share of the market. For a long period of time, most companies only concentrated on setting up retail stores in the downtown areas, mainly in first tiers and Tier II cities in mainland China. As urbanization became a reality in China, there has been development of several small and medium-sized cities into larger ones that are offering great opportunities to the Chinese investors as well as those from outside the country. As a result of the improving infrastructure and concentrated population, great opportunities are being created in the Chinese retail industry.
Currently, it is estimated that almost 58% of the retail industry in China is occupied by stores in tier two and tier three cities. Thus, it is very important for any potential investors focusing on the Chinese retail industry to take a keen look at the cities. This includes keeping in mind the various needs of the residents of those rapidly expanding smaller cities. Investors need to design solutions that can suit the cities in terms of product portfolios, marketing approaches among others in order to fit into the growing retail industry in China.
Based on the steady rise in household income in China, consumers are becoming more sophisticated in terms of their needs. They are now looking for products of the best quality even if it means paying premium prices for them. Such are important factors that investors eying the Chinese retail industry need to put into consideration. Besides, it is also expected that consumer competition is likely to take an upward shift since more multinational companies are beginning to stamp their presence in China.
Considering the rapid growth and wealth of potential that exists in the China retail market, it continues to attract several investors on the international platform. For foreign investors eyeing to also rake in from the booming retailing industry in China, it is advisable that you begin by setting up physical retail shops in the country’s cities.
The essay above on China Retail Industry is among the many you will find online at www.customwritingservice.org. If you need assistance in writing a more advanced essay at college or university level get in touch with us and we will help you.