China Retail Market Performance: E-commerce Booms and Autonomous Shopping Carts Lead the Way Despite Recent Dip in Sales

The China retail market is sizable and growing rapidly, Supermarkets, department stores, and specialty stores all saw a rise in sales in 2019, with the nominal growth rate of total retail sales of consumer goods in China being 2% higher than the real growth rate of 6% to CNY 41,164.9 billion (USD 5,960 billion). In total, China's domestic consumption accounts for close to 55% of the country's GDP.

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Retailers in China are now experimenting with several methods to get rid of some of the remaining barriers to online shopping. In the past, Chinese consumers have been reluctant to buy certain products, especially fresh food, without first seeing them. As a result, internet retailers are turning their stores into hubs and showrooms for entertainment.

■ Sudden Drop in Retail
In December 2022, China's retail commerce shrank by 1.8% yoy, less than the 5.9% reduction in the previous month and less than market projections of an 8.6% contraction.

■ E-commerce Performance
China is home to the world's largest e-commerce market, with more than half of global e-commerce transactions taking place in the country. The impact of COVID-19 on the online retail sector during 2020 was evident through a steep increase in demand and supply amid lockdown measures. The penetration of online retail transactions increased as consumption shifted from offline retailers. In 2020, e-commerce exports were CNY 1.12 trillion, which increased by 40.1% on a yearly basis, while imports stood at CNY 570 billion, up 16.5% year over year.

■ FDI in China
The amount of foreign direct investment (FDI) inflows into China increased in 2022 for the third year in a row. According to reports, many foreign-funded businesses will continue to operate in the market for a long time as China provides a mass consumption market, a strong manufacturing base, and a favorable business environment.
China's FDI, according to the Ministry of Commerce (MOFCOM), continued to expand steadily and reached USD 189.13 billion, up 8% in US dollars. The total FDI inflows received were USD 173.48 billion in 2021 and USD 144.37 billion in 2020.

■ Autonomous Shopping Cart
Google, Walmart, and LG are some of the leading companies in technology, but 7Fresh is one of the companies that has advanced technology to a new level and is truly guiding this trend. In 2018, JD.com-owned 7Fresh debuted its first location in Beijing's Dazu Plaza Shopping Center. Because of the smart shopping carts, it is one of the most technologically sophisticated supermarkets in the entire world. These help customers shop hands-free by automatically navigating the store. Additionally, they provide a touchscreen pad that shows information and an app for in-store payments.

Key Facts of the China Retail Market
► Investments in the Market
The retail market in China is experiencing a number of JVs that are assisting the nation's rise in FDI. Among the most recent JVs are: Thomas Meyer has formed a joint venture with E-Shine to grow its internet operations in China. China Resources Enterprise (CRE) and Fung Investments announced the creation of a joint venture investment platform worth USD 300 million that will focus on companies with high-quality brands, goods, services, and technologies.

► M&A in Retail and Wholesale Sector
In the past year, 77 merger and acquisition (M&A) deals - both pending and completed, were reported in the retail and wholesale sectors of China, with a combined deal value of more than USD 4,531 million.

► Food Packaged Led Growth
Due to COVID-driven hoarding and increased health and hygiene concerns, packaged food and home care led growth during the first three quarters among the four key industries. In the first three quarters of 2022, packaged food alone experienced an average 7.4% value growth, along with 4.6% volume growth and a 2.6% ASP rise.

► High Transportation Cost
Compared to affluent nations like Japan, Europe, and North America, China's cost of shipping goods is up to 50% higher.

Makreo Research has published a study on the retail market titled, "China Retail Industry Forecast 2028." Utilizing both qualitative and quantitative methodologies, market assessment has merged the effects of macroeconomic and microeconomic scenarios. The market underwent a lot of changes following the COVID-19 eruption, which provided the market with a strong push. We consequently examined the outcomes of the pre- and post-COVID scenarios. Future possibilities have been assessed while accounting for a number of affecting factors and the predicted market potential.

The research examines the revenue generated by the retail industry as well as market segmentation by platforms (online and offline), locations (urban and rural), retail formats (supermarket, convenience store, professional shop, department store, specialty store), and cities (Shanghai, Beijing, Chongqing, Guangzhou, Chengdu, Shenzhen, Suzhou, Nanjing, Hangzhou, Wuhan).

■ Key Questions Answered
1. How China Retail market is coping up with the economy set back led by COVID-19?
2. At what rate has retail market revenue grown in the past, and what is the present state of the industry?
3. What are the major driving factors that have accounted for a push in the China retail industry in the past?
4. What is the expected revenue of the China retail market by 2028?
5. Who are the major players operating in the retail market, and how are these players contributing to the industry?
6. At what rate is China's online retail and e-commerce market growing?
7. How is the Chinese retail market segmented by retail format?
8. Which industry plays a dominant role in terms of generating maximum demand for retail markets in China?
9. How has the China retail industry responded to another COVID-19 variant that led to movement restrictions?
10. How has the Chinese economy performed in the past, and what is the future expected growth outlook?

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