China Powers of Retailing 2014

Key findings

In 2013, the total retail sales of consumer goods exceeded RMB23 trillion at its 4th consecutive years with decreasing growth rate. The year-on-year nominal growth rate is 13.1% but will be expected to drop by 0.7% in 2014. In the headwind, retailers need to explore innovative paths, and seek breakthroughs in expansion, operation, and distribution/logistics to sustain their business.

Although the sales of China Top 100 retailers exceeded 2 trillion in 2013, single-digit growth of 9.9% appears for the first time. The proportion of the Top 100 retailers' sales in the total retail sales of consumer goods decreased from 10.8% (2009) to 8.7%. From Deloitte's viewpoint, the main causes of such decline are due to macroeconomic growth slowdown, weak consumption, the split-flow of E-commerce channels, consumption upgrade and steadily high costs.

Looking at the development trends of various sectors and business types, convenience stores and shopping malls have demonstrated a more favorable standing in development. Convenience stores may take over commanding heights of the retail industry by leveraging the convenience of space, time and service as well as the proximity to the consumers. As e-commerce business and convenience stores are integrating gradually, a stronger collaboration among e-commerce businesses, service providers and product suppliers with convenience stores is expected. This will deliver a new business model focused on community customers to provide an integrated experience of social life, lifestyle and shopping services. At the same time, shopping centres are expected to proceed at a faster pace to grow functions in entertainment, fitness and dining services to meet their consumers' diversified requirements.

Comparatively, supermarkets, department stores and specialty stores have been experiencing slower development in the past two years and have entered into adjustment and transformation.