Continuously more and more retail companies of foreign market are looking for speeding up their business in China’s retail market. The expansion is taking place at a great speed as China has proved to be a good thriving ground for expansion of businesses. China has been hugely and dedicatedly developing the structure of its consumption which has been reported in studies. Many foreign retail companies have opened their branches in the China market in recent years. Many online casinos like happylook have opened their site in China.
This has been done by introducing new flagship stores of famous brands plus innovative business structures. The very famous retail giant of the US, Walmart, has started with the trend. Subsequently, many other companies have invested in China’s retail market because if the growth and benefits. It has been reported that, in the next 5 to 7 years, Walmart has proposed to open up at least 500 more new stores in China. Walmart has taken this decision so as to double its footprint in the country which is an effective move.
Furthermore, Walmart also announced that they will add almost 200 plus stores, in the following 3 years, in China. Along with this, they also planned to upgrade their stores and add many hi-tech features for maximum customer satisfaction. This will further include a first class digital experience for payment which can only be done through face recognition. Walmart has been growing tremendously at a 6.3 % which is on a year to year basis with respect to the sales. This was their third quarter earnings, only in China, as compared to global sales of 2.5 %.
The main contribution to this growth has been done by the Sam’s club, since the last 5 years, in China retail market. Costco, another retail chain in the US, inaugurated their first store in Shanghai, China. This was in August when the first day itself everyone made go berserk and crazy. Such is the impact and such is the market in China and it is right to say that they are a hit in the retail sector.
Aldi, a well known fresh vegetables and fruit retailer of Germany, has also entered the market of China. They have opened 2 new stores in the last 6 months, in Shanghai and have drawn huge number of consumers. Steps like these are taken to show how the Chinese retail market is open and reciprocating and the end result is known to all. The growth that is being measured is beyond expectations and rapid. The report of the sales only indicates that the market of China’s retail sector is constantly flourishing which also invites other opportunities in the foreign market.
The January to October period has shown a growth in sales at an 8.1 percent which is 4.8 trillion dollars. This amount equals to almost 33.48 trillion Yuan and has been included in studies by the NBS. The NBS or National Bureau of Statistics conducted a study in the Chinese retail market. This growth percentage accelerated to a 9 % which excludes the automobile industry and its sales.
Meanwhile, some foreign retailers have taken this in a different manner and have stopped from venturing into the sector. They could see the immense competition and the challenges that they could face with this expansion. The perception of each retailer is different and they do what they think is best for them. However one can venture and see the results for themselves. A couple of months back, Metro, German wholesaler giant, sold off a major share to the Chinese operational team. They did this by selling off around 80 % of their shares to Wumei technology. Wumei technology is a Beijing based industry and Metro retained only 20 % of their shares.
A similar step has been taken by Carrefour, the chain of French supermarket by selling off 80 % of their stakes. They sold their stakes to Suning International Group Co., which is a big and important unit of the Chinese retail market giant Suning.com. These stakes were approximately 4.8 billion Yuan. Carrefour China has seen some major decline in its sales from its 24 and 210 convenience stores and hypermarkets, respectively. It is estimated that the transaction will be complete by the end of this year.
The Chinese retail market welcomed these international retail giant’s many years ago, but the acceleration has been noticed recently. Apart from the growth, there have been cases where retailers have faced huge losses too. Many of them struggled to keep up with the ever increasing and competitive market and hence died out soon. The major reason behind this was that they were unable to keep up with the up gradation of their business strategies and plans. It was also important on their part to do some research on the Chinese consumers and the market there.
A vital step to become successful that they should have applied was the use of innovation and creativity. This directly implies to the use of technology as the time has been continuously changing over the last two decades. A business house can only go wrong when their homework about the market they are venturing into is not complete. China’s retail market is undoubtedly a good base for international retailers to look for as a business opportunity. Yet, many have seen a downfall and this is because of their shortcomings. Most of the Chinese consumers procure many items that also include luxury goods.
This sector had gone down for sometime but there are chances that this might bounce back. What is required is an understanding of customer needs as with each passing year, the sales are increasing. Around 3 years back, in 2016, it was recorded to contribute only 7 percent on global luxury goods sales and this data has increased positively. That said, Chinese retail consumers contributed to 30 percent of the cumulative global sales of luxury goods. Business houses that are shooting their sales have a good understanding of their customer requirements and cater accordingly. It is pivotal that one constantly updates and brings innovative ideas to their business models to benefit both ways of the scale.