China Retail Market Revenue Forecast 2028: Analysis of Online and Offline Retail Trends: Second Edition

The China Retail Market has witnessed a significant shift in consumer demand, lifestyle preferences, and spending patterns, as the economy continues to expand. To capitalize on the evolving consumption trends, retail brands and shopping centers have proactively adopted new technologies to digitize all aspects of retail, enhance the efficiency of the entire value chain, reduce operating costs, and aggressively pursue innovative business opportunities that offer refined retail services, products, and space.

A surge in joint ventures is fueling China's retail market and its foreign direct investment (FDI) growth. Recently, China Resources Enterprise (CRE) and Fung Investments established a joint venture investment platform worth $300 million, with a focus on high-quality brands, goods, services, and technologies. Another joint venture was formed between Dufry and Alibaba Group, aimed at collaborating in the Chinese travel retail market and exploring digital potential.

However, the start of 2022 saw a positive outlook, which was later hampered by an increase in COVID-19 cases nationwide, leading to government restrictions. The impact of the pandemic, including supply chain delays, imported inflation, and customers' tendency to buy only essential items during lockdowns, has contributed to slow growth in business and a decline in domestic demand, particularly in places like Shanghai.

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⦿ Increasing Online Retail Platform-
China's e-commerce industry is rapidly growing due to multiple factors, such as the country's large population and high accessibility to smartphones and internet. As of January 2022, over 1.02 billion Chinese citizens were using the internet, which is more than three times the number of internet users in the United States. This has made China the world's most digitally connected country, and the COVID-19 pandemic has only amplified the sector's expansion by increasing demand and supply during lockdown measures. With offline consumption shifting to online platforms, online retail transactions have also experienced a surge in penetration.

⦿ Cross-Border eCommerce Booms with Rising Demand for Designer Fashion and International Brands-
The cross-border eCommerce market is witnessing a surge in popularity, thanks to an increase in income levels and the expanding fashion industry. In particular, Chinese consumers have demonstrated a strong preference for purchasing designer clothing, accessories, cosmetics, personal care items, footwear, and bags from cross-border import eCommerce platforms. At the same time, international brands are experiencing a high level of demand, with cross-border channels serving as a bridge between consumers and companies. Businesses are also reaping the benefits, with lower import taxes and fewer compliance requirements for certain product categories.

⦿ Increasing Trade Agreement and New Trade Zones-
China has been quickly expanding its e-commerce trade agreements by signing over 20 memorandums of understanding for e-commerce cooperation and setting up bilateral e-commerce cooperation mechanisms for collaboration in areas like policy exchange, industry promotion, planning coordination, sub-national cooperation, and capacity building. To support its partners in discovering new trade routes and introducing their quality goods to the Chinese market, China has organized numerous events, including nation pavilion launches and livestreaming sessions.

⦿ Key Development-
Over the course of the last year, China's retail and wholesale sectors saw a total of 77 merger and acquisition (M&A) deals either pending or completed, which amounted to a combined deal value of over USD 4,000 million. The month of December 2021 was the most active in terms of deal volume, with a total of 14 transactions and an average deal value of more than USD 50 million.

⦿ Further Key Findings:
➊ Augmented reality (AR) is increasingly being adopted by retailers in China for virtual try-ons, resulting in increased sales. Big companies such as Alibaba, Baidu, and Tencent have invested in AR technology and launched campaigns to entice consumers to retail stores.

➋ For the third year in a row, foreign direct investment (FDI) inflows in China have increased, leading to the continued presence of foreign-funded businesses in the country due to a strong manufacturing base, a favorable business environment, and a mass consumption market.

➌ Local Chinese governments are providing consumption vouchers to stimulate domestic demand, while taking measures to increase people's income. In Shijiazhuang, the capital of Hebei Province, a shopping festival was organized, and consumption vouchers worth Yuan 101 million were distributed for promotions.

➍ Disposable income in China has increased, with nominal income growing by 5% as compared to last year, and the countrywide per capita disposable income of citizens reaching Yuan 36,883. Urban households' per capita disposable income of permanent residence was Yuan 49,283, while rural households' per capita disposable income was Yuan 20,133, indicating a nominal rise of 3.9% and 6.3%, respectively.

Makreo Research recently published a highly comprehensive study entitled "China Retail Industry Forecast 2028: Analysis of Online and Offline Retail Trends - Second Edition". This thorough analysis takes an in-depth look at the past, present, and future outlook of the retail market in China. It examines the industry's performance during both pre-COVID-19 and post-COVID-19 periods, taking into consideration the various external factors that have impacted the industry's fluctuations. Furthermore, the report provides a macro-economic analysis, highlighting the impact of external changes on the retail industry's overall performance. The report also addresses the latest industry trends in China and offers insights into the future prospects of the retail industry in the country.

Find out more:- https://www.makreo.com/report/china-retail-industry-forecast-2028-analysis-of-online-and-offline-retail-trends-second-edition

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