China Retail Industry Forecast 2028

China Retail Industry Forecast 2028

Executive Summary

China, with a population of 1.41 billion, is home to significant retail behemoths like Alibaba, Taobao, Tmall, etc. Retailers and building owners in China are currently evaluating new market niches and growing demand opportunities in order to create novel scenarios that maximise value. Additionally, as there are more online Chinese consumers, the physical and digital worlds are fusing more and more, which is facilitating the creation of vast data sets that span all age groups.

As China grows to become the second-largest economy in the world, the number of people in the middle class is growing. In China now, the middle-class numbers over 300 million people. More than 500 million people are expected to be part of China's new middle class by 2025. In China, the "new middle class" has changed how people shop. Today, this group is more inclined to spend money on spiritual purchases, their consumption habits differ by city, and they are interested in eco-friendly, healthy goods, services, and products.

With the changing consumer lifestyle demand for premium products are rising owing to this retailer are trying to convince customers to buy more expensive products by giving a proposition with a better value through cross-selling and upselling the product, which has been one of the factors contributing to the expansion of the retail market in China. The rising consumer awareness of food safety and health issues is one of the causes that has favored premiumization. This has increased consumer demand for high-end organic food goods, which increasing demand for retail industry in China.

Moreover, with the implementation of living with the COVID-19, China retail industry is facing challenges in Supply chain, Companies are experiencing workforce and labour shortages as a result of the recent increase in virus spread in 2022. In general, the recovery from the pandemic has been made harder for many industries due to a lack of skilled people. The supply of consumer goods to the worldwide market were restricted as a result of the continuous case surge, which has been a significant contributor to labour shortages. This had an unavoidable detrimental impact on businesses and consumers for long period. Major logistics hiccups have caused an accumulation of items in storage and had a negative impact on global supply chains.

Increasing Investment in Cities

With the rapidly growing economy and considerable domestic market, many businesses have already changed their operational priorities from serving the needs of the 80 million residents of China's top-tier cities and the more than 300 million middle-class consumers they serve to fiercely competing with Chinese and foreign rivals in the country's lower-tier cities and counties, particularly in its eastern region.

China's top cities list increased by more than 10 cities in 2022. According to Business Attractiveness 2022, Chengdu, Chongqing, and Hangzhou are the top three first-tier cities that are currently developing.

Online Retail Channel Dominates the Retail Industry

China is home to the world's largest e-commerce market, with more than half of the global e-commerce transactions taking place in the country. The continuously expanding online retail sector has emerged as a key factor influencing growth, employment, and consumption. The consumption market in China underwent an upgrade last year, with customers favoring healthy, environmentally friendly, and high-quality products more and more. Even the automobile manufactures shifted their route to online retailing to survive in the market and to bring back its pace.

Future Outlook

China's retail sales are predicted to experience a modest recovery in 2023 owing to rising consumption of food, beverages, and electronics; however, this recovery is predicted to be less robust than it was in 2021 due to a lower consumer outlook for employment and household income, which is dependent on China's pandemic-related policies. By 2030, it is expected that China's private expenditure would have more than doubled. However, because of the government's "dynamic Zero-COVID" strategy, COVID flare-ups will continue to weaken consumer confidence until 2025.

Moreover, many foreign-invested firms are attempting to reorient their positions in the country's new development structure, emphasising their long-term confidence in functioning in China, with the result that the nation's retail industry will experience positive growth as China pushes forward with industrial innovation, expands domestic market demand, and makes it easier for the movement of domestic and international markets.

Therefore, China retail Market is expected to flourish in coming years.

Makreo research has published study on Retail Market titled, “China Retail Industry Forecast 2028: Analysis of Online and Offline Retail Trends - Second Edition”. Market assessment has been carried out using qualitative and quantitative methods and have combined the impact of macroeconomic and micro economic scenario. The market has witnessed many shifts in recent past after the COVID-19 outburst that given a suggest push in the market therefore, we have studied the impact of pre-COVID and post-COVID scenario. Future outlook has been assessed keeping various influencing factors into consideration and also to assess the expected opportunities in the market.

Segmentation Covered:

• By platform: Online and Offline
• By location: Urban and Rural
• By Retail Format: Supermarket, Convenience Store, Professional Store, Departmental Store, and Specialty Store
• By Cities: Shanghai, Beijing, Chongqing, Guangzhou, Chengdu, Shenzhen, Suzhou, Nanjing, Hangzhou, and Wuhan

Company’s Assessed

• Online Companies:
• JD.Com
• Alibaba
• Pinduoduo
• Vipshop
• Holdings Limited
• TMALL
• Offline Companies:
• RT Mart
• Suning
• Yonghui Superstores
• Wumart Group
• Walmart

Key Questions Answered

• How is the China retail market adapting with the COVID-19-driven economic downturn?
• What is the current situation of the industry and at what pace has the retail market's revenue increased in the past?
• What are the main driving forces that have historically given the Chinese retail business a boost?
• What is the expected revenue of China retail market by 2028?
• Who are the major players in the retail market, and how these players are contributing to the industry?
• How rapidly is the Chinese e-commerce and online retail market expanding?
• How China retail market is segmented by retail format?
• Which sector leads in terms of producing the greatest demand for the retail market in China?
• How did the retail industry in China respond to new COVID-19 variant-driven movement restrictions?
• How the Chinese economy has performed in the past and what is the future expected growth outlook?