China's total retail sales will increase by 47% in local currency terms by the end of the forecast period, growing from an estimated CNY11.50trn(US$1.68trn) in 2009 to a projected CNY16.90trn (US$2.91trn) in 2014, according to online survey company Market Research.
Analysis has shown that 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 12% in US dollar terms.
The growth in the overall retail market will be driven, in large part, by a growing urban population withhigh disposable incomes and an interest in aspirational purchasing. According to socioeconomic forecasters Global Demographics, more than 30% of all urban households in China had yearly incomesin excess of CNY40,000 (US$5,848) in 2007. The National Bureau of Statistics estimates that urban retail sales accounted for nearly 68% of total retail sales in 2009, albeit down slightly on 2008.
A sizeable multinational retail presence following the lifting of foreign direct investment restrictions in 2001 has ensured the early adoption of modern retail best practices in China, withorganised retail - Western-style chain outlets, department stores, supermarkets, etc - already accountingfor an estimated 23% of the total retail market, far higher than India’s 8%.
Retail sectors that are likely to see substantial growth over the forecast period include over-the-counter pharmaceuticals, with estimated sales of US$9.49bn in 2009 predicted to rise by 65% by 2014,reaching US$15.65bn. Automotive sales, worth an estimated US$276.06bn in 2009, are forecast to grow73.5% by 2014, reaching a projected US$478.87bn. Sales of consumer electronic products are predicted to increase by 28%, from an estimated US$131.04bn in 2009 to US$167.31bn before the end of theforecast period.
Retail sales broke throughCNY10trn (US$1.5trn) for the first time in 2008, according to the Ministry of Commerce.
