60 People, 60 Stories

Growing to spend

By Alex Liu (China Daily)
Updated: 2009-09-30 08:26

The retail market in China has evolved considerably in recent years.

Many of the big changes have taken place over the last decade.

In the late-1990s, the big foreign retailers such as Wal-Mart and Carrefour tended to have a presence in major cities, such as Beijing and Shanghai.

China joining the World Trade Organization in 2002 meant that restrictions that had been imposed on overseas retailers had to be lifted.

As a result, the major retailers now have hundreds of stores throughout the country.

Consumers have also become noticeably wealthier, which is reflected in their desire to have the latest TVs, fashion goods and household items.

Non-grocery spending since 2004 has grown by a compound rate of 13.8 percent, almost double the 7.51 percent growth in grocery expenditure.

The last decade has also seen the decline of independent hypermarkets and department stores that used to be a feature of every city in China. Many of these have been taken over by national chains or have closed down. Just as in the West, shopping malls are becoming a new feature of the retail landscape with Chinese consumers liking the idea that you can drive somewhere and get everything under the same roof.

Consumers in China also increasingly like specialist stores. They go to electrical retailers to buy their LCD TVs or to places like IKEA to buy furniture.

Retail patterns have also been radically transformed by the growth of the Internet, with online shopping growing by 17.43 percent a year, which is really being driven by younger consumers.

The overall picture is of the Chinese consumer getting richer and wanting to spend more.

Alex Liu is a research analyst with market research and consulting company Euromonitor International in Shanghai.