Retailing in China 2009: A Market Analysis

Retailing in China 2009: A Market Analysis

Executive Summary

Based upon our own calculations of a realistic retail market size in China should be, between 2002 and 2009, China’s total retail market grew 204.5% in current terms over the review period to RMB6.81trn – representing an annual average growth rate of 17.25%.

Over the past few years, China’s retail market has continued to develop rapidly. New chain store networks, malls and shopping streets are now emerging outside the top three cities of Beijing, Guangzhou and Shanghai, as retailers extend their reach into new growth areas of first-tier cities, as well as into second-, third- and other-tier cities. There is aggressive consolidation in the market, as larger operators swallow up smaller players, while there are equally significant numbers of failures, both retail companies and shopping malls.

Now, as the Chinese economy lurches from being one reliant on export manufacturing to one more reliant on a robust domestic consumer market, the retail market is becoming even more important to the country. The race is now on to create the infrastructure that will bring more of rural China into the fold of the consuming classes, driving a need for new transport and storage facilities, computerised inventory, a closed chill-chain, modern management systems and all the other accoutrements of a developed retail system.

Foreign retailers and retail suppliers have much to offer in this market, but competition is tough, and the years of rapid retail growth in China could be about to end, making now a crucial time in which to gain a foothold.

China’s retail market is expected to grow by about 45% between 2010 and 2014, to reach a total value of over RMB10.8trn..

Contents

INTRODUCTION1

Report Coverage1
Abbreviations Used1
Other Relevant Reports from Access Asia2

1 NATIONAL RETAIL MARKET3

1.1 Overview3
1.2 Chinese Retail Statistics: Problems with Methodology4
1.2.1 Chinese Retail Statistics: Definitions4
Retail Sales4
The Household Survey4
Household Consumption in GDP4
1.2.2 Chinese Retail Statistics: China’s Private Sector Hidden4
1.2.3 Chinese Retail Statistics: So, How Big is the Consumer Market?5
1.2.4 Chinese Retail Statistics: The Mythical Chinese Middle Class6
Table 1.1MIDDLE AND UPPER INCOME HOUSEHOLDS IN CHINA, 1995/2000/2005/2010/20157
Table 1.2TOTAL CONSUMPTION BY MIDDLE AND UPPER INCOME HOUSEHOLDS, 2005/2010/20157
Table 1.3CONSUMPTION BY MIDDLE AND UPPER INCOME HOUSEHOLDS & % OF TOTAL HOUSEHOLDS, 1995/2000/2005/2010/20158
1.2.5 Chinese Retail Statistics: Developing Domestic Consumption10
1.3 Total Retail Market Size13
1.3.1 Total Market Size: The Total Value of the Retail Market in China13
Table 1.4TOTAL CURRENT VALUE RETAIL SALES, 2000-200913
Table 1.5TOTAL CONSTANT VALUE RETAIL SALES, 2000-200914
Table 1.6PER CAPITA CURRENT VALUE RETAIL SALES, 2000-200914
1.3.2 Total Market Size: Economic Reforms14
1.3.3 Total Market Size: Spread of Organised Retail15
1.4 Food and Non-Food Sales16
1.4.1 Total Food Market: Food & Non-food Sales16
Table 1.7TOTAL CURRENT VALUE RETAIL SALES BY FOOD AND NON-FOOD, 2003-2009*16
1.4.2 Total Food Market: Food/Non-food Split17
Table 1.8% BREAKDOWN OF SALES BY FOOD AND NON-FOOD, 2003-2009*17
1.4.3 Food and Non-Food Sales: Urban and Rural Split17
Figure 1.1: Urban & Rural Food & Non-food Retail Growth Compared, 2002-200817
Table 1.9TOTAL CURRENT VALUE RETAIL SALES BY FOOD & NON-FOOD, 2003-2009*18
1.5 Total Food Sales18
1.5.1 Total Food Sales: Eating Out Versus Eating In18
Table 1.10THE MARKET FOR CONSUMER CATERING AS A PROPORTION OF TOTAL CONSUMER FOOD EXPENDITURE IN CHINA, 2000-200919
Table 1.11TOTAL PER CAPITA MARKET FOR CONSUMER CATERING IN CHINA, 2000-200920
1.5.2 Total Food Sales: Retail Value Trends20
Figure 1.2: Total Volume Growth in Retail Sales of Selected Food Products in China, 2003-200921
Figure 1.3: Per Capita Volume & Growth of Retail Sales of Selected Food Products in China, 2003/200921
Table 1.12CURRENT VALUE RETAIL FOOD SALES BY MAJOR PRODUCT CATEGORY, 2003-2009*22
1.5.3 Total Food Sales: Value Growth23
Table 1.13RETAIL VALUE FOOD SALES GROWTH BY SECTOR, 2003-200923
1.5.4 Total Food Sales: Breakdown by Type24
Table 1.14% BREAKDOWN OF CURRENT VALUE RETAIL FOOD SALES BY SECTOR, 2003-200924
1.6 Urban Food Sales24
1.6.1 Urban Food Sales: Value Trends24
Figure 1.4: Urban Food Sector Retail Growth Compared, 2003-200925
Table 1.15URBAN RETAIL FOOD SALES CURRENT VALUE BY SECTOR, 2003-200925
1.6.2 Urban Food Sales: Percentage Breakdown26
Table 1.16% BREAKDOWN OF URBAN RETAIL FOOD SALES BY SECTOR, 2003-200926
1.7 Rural Food Sales26
1.7.1 Rural Food Sales: Value Trends26
Chart 1.5: Rural Food Sector Retail Growth Compared, 2003-200927
Table 1.17VALUE OF RURAL RETAIL FOOD SALES CURRENT VALUE BY SECTOR, 2003-200927
1.7.2 Rural Food Sales: Percentage Breakdown28
Table 1.18% BREAKDOWN OF VALUE RURAL RETAIL FOOD SALES BY SECTOR, 2003-200928
1.8 Total Non-Food Sales28
1.8.1 Total Non-Food Sales: Value Trends28
Chart 1.6: Total Non-food Sector Retail Growth Compared, 2003-200929
Table 1.19TOTAL NON-FOOD RETAIL SALES CURRENT VALUE BY SECTOR, 2003-200929
1.8.2 Total Non-Food Sales: Percentage Breakdown29
Table 1.20% BREAKDOWN OF CURRENT VALUE NON-FOOD RETAIL SALES BY SECTOR, 2003-200930
1.9 Urban Non-Food Sales31
1.9.1 Urban Non-Food Sales: Value Trends31
Chart 1.7: Urban Non-food Sector Retail Growth Compared, 2003-200931
Table 1.21URBAN NON-FOOD CURRENT VALUE RETAIL SALES BY SECTOR, 2003-200931
1.9.2 Urban Non-Food Sales: Percentage Breakdown32
Table 1.22% BREAKDOWN OF CURRENT VALUE URBAN NON-FOOD RETAIL SALES BY SECTOR, 2003-200932
1.9.3 Urban Non-Food Sales: Ownership of Major Durable Goods32
Table 1.23URBAN HOUSEHOLD OWNERSHIP OF MAJOR DURABLE CONSUMER GOODS, 2002-200833
1.10 Rural Non-Food Sales34
1.10.1 Rural Non-Food Sales: Current Value Trends34
Chart 1.8: Rural Non-food Sector Retail Growth Compared, 2003-200934
Table 1.24RURAL NON-FOOD CURRENT VALUE RETAIL SALES BY BY SECTOR, 2003-200934
1.10.2 Rural Non-Food Sales: Percentage Breakdown35
Table 1.25% BREAKDOWN OF RURAL NON-FOOD CURRENT VALUE RETAIL SALES BY BY SECTOR, 2003-200935
1.10.3 Rural Non-Food Sales: Ownership of Major Durable Goods35
Table 1.26RURAL HOUSEHOLD OWNERSHIP OF MAJOR DURABLE CONSUMER GOODS, 2003-200935
1.11 Leading Retailers36
1.11.1 Leading Retailers: The Top-100 Listed Chinese Retailers36
Turnover36
Operating Profit36
Profitability36
Share of Total Retail Sales36
Table 1.27ACHINA’S 100 LEADING LISTED RETAILERS RANKED BY TURNOVER, 2006-2008 & H108/H10937
Table 1.27BCHINA’S 100 LEADING LISTED RETAILERS RANKED BY TURNOVER, 2006-2008 & H108/H10938
Table 1.28ACHINA’S 100 LEADING LISTED RETAILERS’ OPERATING PROFIT, 2006-2008 & H108/H10939
Table 1.28BCHINA’S 100 LEADING LISTED RETAILERS’ OPERATING PROFIT, 2006-2008 & H108/H10940
Table 1.29ACHINA’S 100 LEADING LISTED RETAILERS’ OPERATING PROFIT % SHARE OF TURNOVER, 2006-2008 & H108/H10941
Table 1.29BCHINA’S 100 LEADING LISTED RETAILERS’ OPERATING PROFIT % SHARE OF TURNOVER, 2006-2008 & H108/H10942
Table 1.30ACHINA’S 100 LEADING LISTED RETAILERS’ % ANNUAL TURNOVER GROWTH, 2007-2008 & H108/H10943
Table 1.30BCHINA’S 100 LEADING LISTED RETAILERS’ % ANNUAL TURNOVER GROWTH, 2007-2008 & H108/H10944
Table 1.31ACHINA’S 100 LEADING LISTED RETAILERS BY % ANNUAL OPERATING PROFIT GROWTH, 2006-2008 & H108/H10945
Table 1.31BCHINA’S 100 LEADING LISTED RETAILERS BY % ANNUAL OPERATING PROFIT GROWTH, 2006-2008 & H108/H10946
Table 1.32ACHINA’S 100 LEADING LISTED RETAILERS % SHARE OF TOTAL RETAIL SALES IN CHINA, 2006-2008 & H10947
Table 1.32BCHINA’S 100 LEADING LISTED RETAILERS % SHARE OF TOTAL RETAIL SALES IN CHINA, 2006-2008 & H10948
1.11.2 Leading Retailers: Top 30 Chainstore Retailers’ Turnover & Stores49
Table 1.33CHINA’S TOP-30 CHAIN-STORE RETAILERS’ TURNOVER, 2004-200849
Table 1.34CHINA’S TOP-30 CHAIN-STORE RETAILERS’ STORE NUMBERS, 2004-200850
Table 1.35CHINA’S TOP-30 CHAIN-STORE RETAILERS’ AVERAGE SALES TURNOVER PER STORE, 2004-200851
1.11.3 Leading Retailers: Top 30 Chainstore Retailers’ Shares51
Table 1.36CHINA’S TOP-30 CHAIN-STORE RETAILERS SHARE OF TOTAL RETAIL SALES, 2004-200852
1.11.4 Leading Retailers: Leading Foreign-invested Retailers53
Table 1.37COMPARISON OF CHINA’S 10 LEADING FOREIGN-INVESTED RETAIL CHAINS, 2004-200854
1.11.5 Leading Retailers: Top 50 FMCG Chainstore Retailers’ Turnover & Stores55
Table 1.38CHINA’S TOP 50 FAST MOVING CONSUMER GOODS (FMCG) CHAIN-STORE RETAILERS TOTAL SALES TURNOVERS AND OUTLET NUMBERS, 200856
Table 1.39CHINA’S TOP 50 FAST MOVING CONSUMER GOODS (FMCG) CHAIN-STORE RETAILERS AVERAGE OUTLET SALES TURNOVER, 200857
1.12 Retail Prices58
1.12.1 Prices: Retail Price Indices58
Table 1.40AVERAGE INCOME ANNUAL GROWTH BY SECTOR, 2005–200860
Table 1.41RETAIL PRICE INDICES BY BROAD SECTOR, 2000-2008*61
1.13 Outlook61
1.13.1 Outlook: Forecast Trends61
Year of the Tiger: Return of Tiger Economics?61
Costs of Operation62
Consumer Thrift62
Company Competition63
Urbanisation63
1.13.2 Outlook: Total Market Size64
Table 1.42FORECAST TOTAL CONSTANT VALUE RETAIL SALES, 2010-201465
1.13.3 Outlook: Food/Non-food & Urban/Rural Values65
Table 1.43FORECAST CONSTANT VALUE RETAIL MARKET BY FOOD/NON-FOOD & URBAN/RURAL SPLITS, 2010-201465
1.13.4 Outlook: Food/Non-food & Urban/Rural Shares66
Table 1.44% BREAKDOWN OF FORECAST CONSTANT VALUE RETAIL MARKET BY FOOD/NON-FOOD & URBAN/RURAL SPLITS, 2010-201466
1.13.5 Outlook: Growth Rates66
Table 1.45ANNUAL GROWTH RATES FOR FORECAST CONSTANT VALUE RETAIL MARKET BY FOOD/NON-FOOD & URBAN/RURAL SPLITS, 2010-201466
1.14 Retailing in Context66
1.14.1 Retailing in Context: The Health of the Economy66
China Economic Overview66
1.14.2 Retailing in Context: Macroeconomic Context67
Table 1.46RETAIL SALES AS A % OF GDP, 2003-200968
1.14.3 Retailing in Context: Retail Sales and Consumer Spending68
Table 1.47RETAIL SALES AS A % OF CONSUMER EXPENDITURE, 2003-200968
1.14.4 Retailing in Context: Sales by Habitation69
Table 1.48RETAIL SALES VALUE BY HABITATION, 2003-200969
Table 1.49RETAIL SALES % BREAKDOWN BY HABITATION, 2003-200969
1.14.5 Retailing in Context: Healthcare70
Healthcare Market Size70
Table 1.50GOVERNMENT HEALTHCARE SPENDING AS A % OF TOTAL GOVERNMENT SPENDING, 1999-200870
The Demographic Time-bomb70
Private Health Insurance Uptake Low71
Price Cuts, Corporate Battles & Piracy71
Changes to the Healthcare System71
1.14.6 Retailing in Context: Media & Entertainment72
Table 1.51VOLUME AUDIO AND VIDEO MEDIA SALES IN CHINA, 2004-200772
Table 1.52VALUE AUDIO AND VIDEO MEDIA SALES IN CHINA, 2004-200772
Table 1.53VALUE RECORDED MUSIC SALES IN CHINA BY PHYSICAL AND DIGITAL SECTORS, 2006/200773
Music on the Download73
Table 1.54MOBILE MUSIC REVENUES IN CHINA, 2004-201574
1.14.7 Retailing in Context: Adspend74
Conventional Media Advertising74
Table 1.55ADVERTISING EXPENDITURE IN CHINA, 2004-200874
Online Advertising75
Table 1.56ONLINE ADVERTISING EXPENDITURE IN CHINA, 2004-200875
Leading Advertised Product Categories75
Table 1.57TOP 10 ADVERTISING CATEGORIES IN CHINA, 200876
Leading Advertised Brands76
Table 1.58TOP 10 ADVERTISING BRANDS BY ADSPEND IN CHINA, 2007/200876
Leading Advertisers76
Table 1.59CHINA’S TOP TEN ADVERTISERS, 2004-200677
Table 1.60CHINA’S TOP TEN ADVERTISERS BY ADSPEND, 2006-200777
Table 1.61FIRMS WITH HIGHEST PORTION OF WORLD AD BUDGETS IN CHINA, 200877
Table 1.62CHINA’S TOP TEN ADVERTISERS BY ADSPEND, 1Q 200978
The Prime-time Advertising Auction78
Table 1.63PRIME-TIME ADVERTISING AUCTION ON CHINA’S CCTV, 2000-201078
Brand Preferences Choice Factors in China79
Table 1.64BRAND PREFERENCES IN TERMS OF AGE GROUPS & LOCATIONS IN CHINA, 200779
Table 1.65FACTORS DETERMINING BRAND CHOICE IN CHINA, 200780
Table 1.66BRAND PREFERENCES IN CHINA, 200780
“Chameleon” Brands80
Table 1.67TOP CHAMELEON BRANDS IN CHINA, 200881
1.14.8 Retailing in Context: Emerging Local Brands81
Table 1.68CHINA’S MOST VALUABLE BRANDS, 2008/200982
Table 1.69CHINA’S TOP 5 MOST VALUABLE BRANDS, 200982
1.14.9 Retailing in Context: Tourism & Travel82
Table 1.70TOTAL AND PER CAPITA TOURISM SPENDING BY TYPE, 2002-200883
Table 1.71TOTAL AND PER CAPITA DOMESTIC TOURISM IN CHINA, 2002-200883
Table 1.72TOTAL AND PER CAPITA DOMESTIC & INTERNATIONAL AIR PASSENGER TRAFFIC IN CHINA, 2003-200884
1.14.10 Retailing in Context: The Transport Gap84
Transport Infrastructure Development & Investment85
Table 1.73TOTAL FREIGHT TRANSPORT ROUTES DISTANCE BY TYPE IN CHINA, 2002-200885
Table 1.74TOTAL FREIGHT VOLUME CARRIED BY TRANSPORT TYPE IN CHINA, 2002-200886
Road Freight86
Logistics Development87
Warehouse Development89
Pallets89
Total Transport Distance90
Table 1.75TOTAL VOLUME OF PASSENGER TRANSPORT BY TYPE IN CHINA, 2002-200890
Average Transport Distance90
Table 1.76AVERAGE PER CAPITA PASSENGER TRANSPORT DISTANCES FOR BY FORM OF TRANSPORT, 1999-200891
Vehicle Ownership91
Table 1.77PRIVATE VEHICLE OWNERSHIP IN CHINA BY TYPE, 2002-200892
1.15 Current Issues92
1.15.1 Current Issues: Unemployment92
1.15.2 Current Issues: Over-development of Malls93
1.15.4 Current Issues: Tale Of Two Cities: Shanghai & Beijing95
1.15.5 Current Issues: Rural Retailing Development Project96
Table 1.78STANDARDS FOR COUNTRYSIDE STORES IN VILLAGES97
Table 1.79STANDARDS FOR COUNTRYSIDE STORES IN TOWNS/TOWNSHIPS97
Table 1.80RURAL RETAILING PROJECT COUNTRYSIDE STORES IN VILLAGES, APRIL 200998
Table 1.81RURAL RETAILING PROJECT COUNTRYSIDE STORES IN TOWNS/TOWNSHIPS, APRIL 200998
Table 1.82RURAL RETAILING PROJECT DISTRIBUTION CENTRES, APRIL 200999
Table 1.83RURAL RETAIL DEVELOPMENT PROJECT TOTAL NUMBER OF PARTICIPATING COMPANIES, 2005-2008100
Table 1.84RURAL RETAIL DEVELOPMENT PROJECT COMPANY STRUCTURE, 2007100
1.15.6 Current Issues: Linking the Chill Chain102
1.15.7 Current Issues: Private Label103
Table 1.85CHINA TOP-100 RETAILER’S TOTAL SALES AND PRIVATE LABEL SALES COMPARED, 2005-2009*105
1.15.8 Current Issues: Hypermarkets Gaining Popularity106
Table 1.86SHARE OF GROCERY EXPENDITURE BY TRADE FORMAT, 2001, 2004 & 2007106
Table 1.87CONSUMER PREFERENCE FOR FRESH FOOD BY STORE FORMAT, 2005 & 2007106
Table 1.88CONSUMER PREFERENCE FOR FOOD KEPT UNDER NORMAL TEMPERATURE BY STORE FORMAT, 2005 & 2007106
Table 1.89CONSUMER PREFERENCE FOR CHILLED FOOD BY STORE FORMAT, 2005 & 2007107
1.15.9 Current Issues: Rural Appliance Rebate Program107
Table 1.90DURATION OF RURAL APPLIANCE REBATE SCHEME108
Table 1.91PER 100 RURAL HOUSEHOLD OWNERSHIP OF WASHING MACHINE, REFRIGERATOR, COLOUR TV, MOBILE PHONE & AIR CONDITIONER, 2007108
Table 1.92PER 100 RURAL HOUSEHOLD OWNERSHIP OF WASHING MACHINE, REFRIGERATOR, COLOUR TV & AIR CONDITIONER, 2006109
Table 1.93PER CAPITAL NET INCOME OF RURAL HOUSEHOLDS, 2006-2007109
Table 1.94MAXIMUM PRICE & ITEM FOR PURCHASE IN RURAL APPLIANCE REBATE SCHEME110
Table 1.95NUMBER OF COMPANIES AND THEIR PRODUCTS IN RURAL APPLIANCE REBATE SCHEME, PHASE I-III111
Table 1.96NUMBER OF COMPANIES AND THEIR PRODUCTS IN RURAL APPLIANCE REBATE SCHEME, PHASE IV111
Table 1.97RURAL APPLIANCE REBATE SCHEME SALES BY PROVINCE, UP TO 10 APRIL 2009112
Table 1.98RURAL APPLIANCE REBATE SCHEME TOP THREE MOST POPULAR ITEMS, UP TO 22 MAY 2009112
Table 1.99RURAL APPLIANCE REBATE SCHEME SALES IN CHONGQING, UP TO 10 MARCH 2009113
Table 1.100RURAL APPLIANCE REBATE SCHEME SALES IN SICHUAN, UP TO 27 SEPTEMBER 2008113
Table 1.101RURAL APPLIANCE REBATE PROGRAM SALES IN SICHUAN, SHANDONG & HENAN, UP TO MAY 2008113
Table 1.102RURAL APPLIANCE REBATE PROGRAM SALES IN SICHUAN, SHANDONG & HENAN, UP TO NOVEMBER 2008114
Table 1.103RURAL APPLIANCE REBATE PROGRAM: SURVEY ON RURAL CONSUMERS ON PREFERRED PRODUCTS114
Table 1.104TOP THREE BRAND SHARES OF THE RURAL APPLIANCE REBATE SCHEME IN SHANDONG, UP TO 25 MAY 2008114
Table 1.105RURAL APPLIANCE REBATE PROGRAM TOP 10 BRANDS IN TERMS OF SALES (NATIONWIDE), UP TO 22 MAY 2009115
1.15.10 Current Issues: Packaging (Dealing With Massive Amounts of Waste)117
1.16 Seasonal Retail Trends119
1.16.1 Key Sales Periods: Overview119
Table 1.106ANNUAL NATIONAL HOLIDAYS119
Table 1.107MAJOR HOLIDAY RETAIL SALES, 2005-2009119
1.16.2 Seasonal Retail Trends: Chinese New Year120
1.16.3 Seasonal Retail Trends: Christmas120
1.16.4 Seasonal Retail Trends: May Holiday120
1.16.5 Seasonal Retail Trends: Children’s Day121
1.16.6 Seasonal Retail Trends: Other National Holidays and Festivals121
1.16.7 Seasonal Retail Trends: Seasonality & Climate121

2 REGIONAL RETAIL MARKETS123

2.1 Provincial GDP123
Table 2.1PROVINCIAL GDP VERSUS NATIONAL GDP GOVERNMENT STATISTICS, 2003-2009123
2.2 Provincial Retail Sales124
2.2.1 Provincial Retail Sales: Total & Per Capita Sales124
Map 2.1PER CAPITA RETAIL SALES BY PROVINCE, 2000, 2008, 2009124
Table 2.2TOTAL RETAIL SALES BY PROVINCE, 2003-2009125
Table 2.3PER CAPITA RETAIL SALES BY PROVINCE, 2003-2009126
2.2.2 Provincial Retail Sales: China’s Leading Shoppers Spend Less Than US$10 A Day!127
Table 2.4US$ PER CAPITA ANNUAL AND WEEKLY RETAIL SALES BY TOP- , MIDDLE- & BOTTOM-SCALES, 2003-2009127
2.2.3 Provincial Retail Sales: Leading Cities128
Table 2.5LEADING CITIES KEY ECONOMIC INDICATORS, RANKED BY POPULATION SIZE, 2008128
Table 2.6LEADING CITIES TOTAL & PER CAPITA RETAIL SALES, 2006-2008129
2.2.4 Provincial Retail Sales: High Levels of Savings – Self-taxation?131
Table 2.7LEADING CITIES KEY HOUSEHOLD SAVINGS INDICATORS, 2008131
2.2.5 Provincial Retail Sales: Consumer Spending Power132
Table 2.8URBAN AVERAGE EXPENDABLE INCOME, EXPENDITURE & POTENTIAL EXPENDABLE INCOME AFTER BASIC OUTGOINGS, 2002-2008133
2.3 The Key Retail Regions (“Consuming China”)133
Table 2.9POPULATION AND PER CAPITA GDP OF “CONSUMING CHINA”, 2008133
Table 2.10TWO COMPARATIVE ESTIMATES OF THE TOTAL SIZE AND SHAPE OF “CONSUMING CHINA”, 2007134
Table 2.11LEADING “CONSUMING CHINA” CITIES KEY ECONOMIC INDICATORS, 2008135
Table 2.12COMPARATIVE BREAKDOWN OF AVERAGE HOUSEHOLD INCOME & SPENDING IN “CONSUMING CHINA” CITIES’ AGAINST TOTAL NATIONAL AVERAGE, 2008136
2.4 The New Retail Regions (“Emerging China”)136
Table 2.13POPULATION AND PER CAPITA GDP OF “EMERGING CHINA”, 2008137
Table 2.14COMPARATIVE BREAKDOWN OF AVERAGE HOUSEHOLD INCOME & SPENDING IN “EMERGING CHINA” CITIES AGAINST “CONSUMING CHINA” CITIES AND TOTAL NATIONAL AVERAGE, 2008138

3 RETAIL INDUSTRY STRUCTURE140

3.1 Number of Outlets140
3.1.1 Number of Outlets: Problems With The Retail Industry Data in China140
Nobody Really Knows How Many Shops There Are In China140
Nobody Really Knows How Many Shop Assistants There Are In China140
Problems With Definitions Of Retail Sectors141
3.1.2 Number of Outlets: Total Number141
Table 3.1TOTAL NUMBER OF RETAIL OUTLETS, 2002-2008142
3.2 Definitions of China’s Retail Outlet Sectors142
3.2.1 Definitions of China’s Retail Outlet Sectors: Licensed Individual Stores142
3.2.2 Definitions of China’s Retail Outlet Sectors: Supermarkets, Hypermarkets and C-stores142
3.2.3 Definitions of China’s Retail Outlet Sectors: Department Stores142
3.2.4 Definitions of China’s Retail Outlet Sectors: Farm Supply Shops143
3.2.5 Definitions of China’s Retail Outlet Sectors: Hardware Stores143
3.2.6 Definitions of China’s Retail Outlet Sectors: Other Food Shops143
3.2.7 Definitions of China’s Retail Outlet Sectors: Specialist Stores/Franchise Stores143
3.2.8 Definitions of China’s Retail Outlet Sectors: Grain Stores143
3.2.9 Definitions of China’s Retail Outlet Sectors: Daily Use Goods Stores144
3.2.10 Definitions of China’s Retail Outlet Sectors: Free Markets144
3.2.11 Definitions of China’s Retail Outlet Sectors: Fabric Shops144
3.2.12 Definitions of China’s Retail Outlet Sectors: Medicine Shops144
3.2.13 Definitions of China’s Retail Outlet Sectors: Bookshops144
3.3 Retail Sector Outlets144
3.3.1 Retail Sector Outlets: Outlets by Type144
Chart 3.1: % GROWTH IN RETAIL OUTLETS BY SECTOR, 2002-2008145
Table 3.2NUMBER OF RETAIL OUTLETS BY SECTOR, 2002-2008145
3.3.2 Retail Sector Outlets: Sales by Outlet Type146
Chart 3.2: % GROWTH IN TOTAL VALUE SALES OF RETAIL OUTLETS BY SECTOR, 2002-2008146
Table 3.3SALES VALUE OF RETAIL OUTLETS BY SECTOR, 2002-2008146
3.3.3 Retail Sector Outlets: Average Per Store Sales by Outlet Type147
Chart 3.3: % Growth in Average Retail Sales Value Per Outlets by Sector in China, 2002-2008147
Table 3.4AVERAGE PER STORE SALES VALUE OF OUTLETS BY SECTOR, 2002-2008147
3.4 Department Stores148
3.4.1 Department Stores: Directly-Owned Outlets148
Table 3.5DIRECTLY-OWNED DEPARTMENT STORE TOTAL OUTLETS, FLOOR SPACE, STAFF, SALES & PURCHASES, 2003-2009*148
3.4.2 Department Stores: Franchised Outlets149
Table 3.6FRANCHISED DEPARTMENT STORE TOTAL OUTLETS, FLOOR SPACE, STAFF, SALES & PURCHASES, 2003-2009*149
3.4.3 Department Stores: Total Outlets150
Table 3.7TOTAL DEPARTMENT STORE TOTAL OUTLETS, FLOOR SPACE, STAFF, SALES & PURCHASES, 2003-2009*150
3.4.4 Department Stores: Outlet Efficiency151
Table 3.8TOTAL DEPARTMENT STORE MARKET EFFICIENCY, 2003-2009*151
3.4.5 Department Stores: Outlet Profitability152
Table 3.9TOTAL DEPARTMENT STORE PROFITABILITY, 2003-2009*152
3.4.6 Department Stores: Leading Department Store Sales & Outlets153
Top 20 National Department Stores153
Table 3.10CHINA’S TOP 20 INDIVIDUAL DEPARTMENT STORES, 2007153
Table 3.11CHINA’S TOP 20 INDIVIDUAL DEPARTMENT STORES, 2006154
Top 20 Shanghai Department Stores154
Table 3.12TOP 20 INDIVIDUAL SHANGHAI DEPARTMENT STORES, 2008154
Table 3.13TOP 20 INDIVIDUAL SHANGHAI DEPARTMENT STORES, 2006155
Table 3.14TOP 20 INDIVIDUAL SHANGHAI DEPARTMENT STORES, 2005155
Top 10 Beijing Department Stores156
Table 3.15TOP 10 INDIVIDUAL BEIJING DEPARTMENT STORES, 2007156
3.5 Supermarkets & Hypermarkets156
3.5.1 Supermarkets & Hypermarkets: Supermarket Industry Above the Official Benchmark156
Table 3.16SUPERMARKET TOTAL OUTLETS, FLOOR SPACE, STAFF, SALES & PROFITS FOR CHAIN STORES ABOVE THE GOVERNMENT STATISTICAL THRESHOLD, 2002-2008157
Table 3.17SUPERMARKET AVERAGE OUTLET FLOOR SPACE & STAFF FOR CHAIN STORES ABOVE THE GOVERNMENT STATISTICAL THRESHOLD, 2002-2008157
Table 3.18SUPERMARKET AVERAGE OUTLET SALES FOR CHAIN STORES ABOVE THE GOVERNMENT STATISTICAL THRESHOLD, 2002-2008157
Table 3.19SUPERMARKET AVERAGE OUTLET NET PROFITS FOR CHAIN STORES ABOVE THE GOVERNMENT STATISTICAL THRESHOLD, 2002-2008158
3.5.2 Supermarkets & Hypermarkets: The Official Benchmark & Beyond158
Table 3.20SUPERMARKET TOTAL OUTLETS, FLOOR SPACE, STAFF, SALES & PROFITS FOR CHAIN STORES ABOVE & BELOW THE GOVERNMENT STATISTICAL THRESHOLD, 2002-2008158
Table 3.21SUPERMARKET AVERAGE OUTLET FLOOR SPACE & STAFF FOR CHAIN STORES ABOVE & BELOW THE GOVERNMENT STATISTICAL THRESHOLD, 2002-2008159
Table 3.22SUPERMARKET AVERAGE OUTLET SALES FOR CHAIN STORES ABOVE & BELOW THE GOVERNMENT STATISTICAL THRESHOLD, 2002-2008159
Table 3.23SUPERMARKET AVERAGE OUTLET NET PROFITS FOR CHAIN STORES ABOVE & BELOW THE GOVERNMENT STATISTICAL THRESHOLD, 2002-2008160
3.5.2 Supermarkets & Hypermarkets: Supermarket Industry Sectors By Size160
Store Size & Sales160
Table 3.24ESTIMATED AVERAGE SUPERMARKET OUTLET SALES, PROFITS, SIZE & STAFF (INCLUDING STORES BELOW THE GOVERNMENT STATISTICAL THRESHOLD) BY BROAD SIZE CLASS OF STORE, 2002-2008161
Outlets161
Table 3.25ESTIMATED SUPERMARKET NUMBER OF OUTLETS (ABOVE THE GOVERNMENT STATISTICAL THRESHOLD) BY BROAD SIZE CLASS OF STORE, 2002-2008162
Floorspace162
Table 3.26ESTIMATED SUPERMARKET AREA OF FLOORSPACE (ABOVE THE GOVERNMENT STATISTICAL THRESHOLD) BY BROAD SIZE CLASS OF STORE, 2002-2008163
Staff163
Table 3.27ESTIMATED SUPERMARKET NUMBER OF STAFF (ABOVE THE GOVERNMENT STATISTICAL THRESHOLD) BY BROAD SIZE CLASS OF STORE, 2002-2008164
Sales164
Table 3.28ESTIMATED SUPERMARKET SALES REVENUE (ABOVE THE GOVERNMENT STATISTICAL THRESHOLD) BY BROAD SIZE CLASS OF STORE, 2002-2008165
Profits165
Table 3.29ESTIMATED SUPERMARKET NET PROFITS (ABOVE THE GOVERNMENT STATISTICAL THRESHOLD) BY BROAD SIZE CLASS OF STORE, 2002-2008166
Footfall & Basket Size166
Table 3.30AVERAGE SUPERMARKET CUSTOMER VISITS & BASKET VALUE (ABOVE THE GOVERNMENT STATISTICAL THRESHOLD) BY BROAD SIZE CLASS OF STORE, 2002-2008167
3.5.3 Supermarkets & Hypermarkets: Supermarket Industry By City Tier168
Differences by City Tier168
Outlets168
Table 3.31ESTIMATED SUPERMARKET NUMBER OF OUTLETS (ABOVE THE GOVERNMENT STATISTICAL THRESHOLD) BY CITY-TIER LOCATION, 2002-2008169
Floorspace169
Table 3.32ESTIMATED SUPERMARKET FLOORSPACE (ABOVE THE GOVERNMENT STATISTICAL THRESHOLD) BY CITY-TIER LOCATION, 2002-2008170
Staff170
Table 3.33ESTIMATED SUPERMARKET STAFF (ABOVE THE GOVERNMENT STATISTICAL THRESHOLD) BY CITY-TIER LOCATION, 2002-2008170
Sales170
Table 3.34ESTIMATED SUPERMARKET SALES (ABOVE THE GOVERNMENT STATISTICAL THRESHOLD) BY CITY-TIER LOCATION, 2002-2008171
Profits171
Table 3.35ESTIMATED SUPERMARKET PROFITS (ABOVE THE GOVERNMENT STATISTICAL THRESHOLD) BY CITY-TIER LOCATION, 2002-2008171
Averages171
Table 3.36ESTIMATED AVERAGE SUPERMARKET PER OUTLET STAFF, FLOORSPACE, SALES & PROFIT (ABOVE THE GOVERNMENT STATISTICAL THRESHOLD) BY CITY-TIER LOCATION, 2002-2008172
3.5.4 Supermarkets & Hypermarkets: Leading Supermarket Sales & Outlets172
Selected Retailer Same Store Sales Growth172
Table 3.37SAME-STORE SALES GROWTH OF SELECTED RETAILERS, 2004-2008173
Selected Listed Retailer Non-retail Revenue Significance173
Table 3.38OTHER REVENUE AS A % OF SELECTED LISTED RETAILERS’ TOTAL REVENUE, 2004-2008174
Selected Listed Retailer Net Profit Margins174
Table 3.39SELECTED LISTED RETAILERS’ NET PROFIT MARGINS, 2004-2008174
Selected Listed Retailer Operating Profit Margins175
Table 3.40SELECTED LISTED RETAILERS’ OPERATING PROFIT MARGINS, 2004-2008175
Selected Listed Retailer Gross Profit Margins175
Table 3.41SELECTED LISTED RETAILERS’ GROSS PROFIT MARGINS, 2004-2008175
Selected Listed Retailer Supermarket Business Share of Revenue175
Table 3.42SUPERMARKET/HYPERMARKET/WAREHOUSE STORE SELECTED LISTED RETAILERS’ REVENUE SHARES, 2004-2008176
Selected Listed Supermarket Retailer Current Ratios176
Table 3.43CURRENT RATIO OF SELECTED RETAILERS, 2004-2008176
Selected Listed Supermarket Retailer Debt-Equity Ratios176
Table 3.44DEBT TO EQUITY RATIO OF SELECTED RETAILERS, 2004-2008177
3.6 Convenience Stores178
3.6.1 Convenience Stores: Above the Official Benchmark178
Table 3.45CONVENIENCE STORE TOTAL OUTLETS, FLOOR SPACE, STAFF, SALES & PROFITS FOR CHAIN STORE OPERATORS ABOVE THE GOVERNMENT STATISTICAL THRESHOLD, 2002-2008179
Table 3.46CONVENIENCE STORE AVERAGE OUTLET FLOOR SPACE & STAFF FOR CHAIN STORE OPERATORS ABOVE THE GOVERNMENT STATISTICAL THRESHOLD, 2002-2008179
Table 3.47CONVENIENCE STORE AVERAGE OUTLET SALES FOR CHAIN STORE OPERATORS ABOVE THE GOVERNMENT STATISTICAL THRESHOLD, 2002-2008180
Table 3.48CONVENIENCE STORE AVERAGE OUTLET NET PROFITS FOR CHAIN STORE OPERATORS ABOVE THE GOVERNMENT STATISTICAL THRESHOLD, 2002-2008180
3.6.2 Convenience Stores: Large-scale Chain Convenience Stores180
Key Indicators180
Table 3.49AVERAGE LARGE-SCALE CHAIN URBAN CONVENIENCE STORE FLOOR SPACE, STAFF, SALES & PROFITS INDICATORS, 2002-2008181
Size181
Table 3.50AVERAGE LARGE-SCALE CHAIN URBAN CONVENIENCE STORE TOTAL OUTLETS, AVERAGE SALES, TRANSACTIONS & BASKET VALUE, 2002-2008181
3.6.3 Convenience Stores: The Total Urban Market Structure182
Table 3.51CONVENIENCE STORE TOTAL OUTLETS, FLOOR SPACE, STAFF, SALES & PROFITS FOR CHAIN STORE OPERATORS ABOVE & BELOW THE GOVERNMENT STATISTICAL THRESHOLD, 2002-2008183
Table 3.52CONVENIENCE STORE AVERAGE OUTLET FLOOR SPACE & STAFF FOR CHAIN STORE OPERATORS ABOVE & BELOW THE GOVERNMENT STATISTICAL THRESHOLD, 2002-2008183
Table 3.53CONVENIENCE STORE AVERAGE OUTLET SALES FOR CHAIN STORE OPERATORS ABOVE & BELOW THE GOVERNMENT STATISTICAL THRESHOLD, 2002-2008183
Table 3.54CONVENIENCE STORE AVERAGE OUTLET GROSS PROFITS FOR CHAIN STORE OPERATORS ABOVE & BELOW THE GOVERNMENT STATISTICAL THRESHOLD, 2002-2008184
3.6.4 Convenience Stores: Selected Leading C-store Chains184
C-store Outlets184
Table 3.55NUMBER OF OUTLETS OF SELECTED CONVENIENCE CHAIN STORES, 2004-2008184
C-store Sales185
Table 3.56REVENUE OF SELECTED CONVENIENCE CHAIN STORES, 2004-2008185
Average Outlet Sales185
Table 3.57AVERAGE SALES PER STORE OF SELECTED CONVENIENCE CHAIN STORES, 2004-2008185
Gross Profit Margins185
Table 3.58GROSS PROFIT MARGIN OF SELECTED CONVENIENCE CHAIN STORES, 2004-2008185
Operating Profit Margins186
Table 3.59OPERATING PROFIT MARGIN OF SELECTED CONVENIENCE CHAIN STORES, 2004-2008186
Net Profit Margins186
Table 3.60NET PROFIT MARGIN OF SELECTED CONVENIENCE CHAIN STORES, 2004-2008186
Net Profits186
Table 3.61NET PROFIT OF SELECTED CONVENIENCE CHAIN STORES, 2004-2008186
3.7 DIY, Home Improvement & Furniture Retail186
3.7.1 DIY, Home Improvement & Furniture Retail: The Trade & Retail Markets Compared186
Table 3.62CHINA TOTAL RETAIL, TRADE & COMBINED HOME IMPROVEMENT PRODUCTS MARKET VALUE, 2002/2008187
3.7.2 DIY, Home Improvement & Furniture Retail: Selected Leading C-store Chains188
Table 3.635 LEADING DIY & FURNITURE STORE CHAINS RANKED BY SALES TURNOVER, 2002-2008188
Table 3.645 LEADING DIY & FURNITURE STORE CHAINS NUMBER OF OUTLETS, 2002-2008188
Table 3.655 LEADING DIY & FURNITURE STORE CHAINS AVERAGE SALES TURNOVER PER OUTLET, 2002-2008188
3.7.3 DIY, Home Improvement & Furniture Retail: Leading DIY Chains Market Shares190
Table 3.665 LEADING DIY & FURNITURE STORE CHAINS SHARES OF THE TOTAL HOME IMPROVEMENT RETAIL MARKET, 2002-2008190
3.8 Fashion & Sportswear Retailing190
3.8.1 Fashion & Sportswear Retailing: Apparel Retail Market Size190
Table 3.67CHINA APPAREL RETAIL INDUSTRY OUTLETS, TOTAL RETAIL SALES & AVERAGE PER OUTLET SALES, 2002-2008190
Table 3.68CHINA APPAREL RETAIL SALES VALUE & PERIOD GROWTH BY PRODUCT SECTOR, 2002/2008191
Table 3.69CHINA APPAREL RETAIL SALES VOLUME & PERIOD GROWTH BY PRODUCT SECTOR, 2002/2008191
3.8.2 Fashion & Sportswear Retailing: Apparel Retail Market Shares192
Table 3.70CHINA APPAREL MARKET TOP-20 LISTED RETAILER ESTIMATED MARKET SHARES, 2006-2008192
3.8.3 Fashion & Sportswear Retailing: Sportswear Retail Market Size193
Table 3.71TOTAL & PER CAPITA SPORTSWEAR MARKET VALUE IN CHINA, 2005-2009193
3.8.4 Fashion & Sportswear Retailing: Sportswear Retail Market Shares193
Table 3.72TOTAL SPORTSWEAR MARKET VALUE, 2001/2005/2009194
3.9 Pharmacy Retailing194
3.9.1 Pharmacy Retailing: Spending on Medicines194
3.9.2 Pharmacy Retailing: Health & Beauty Chain Development195
3.9.3 Pharmacy Retailing: The Size of the Leading Pharmacy Chains197
Table 3.73PHARMACY RETAIL SALES BY THE TOP-100, -50, -30 & -10 PHARMACY CHAINS IN CHINA, 2002-2008198
Table 3.74CHINA PHARMACY RETAIL OUTLETS BY OWNERSHIP STRUCTURE, 2006-2008198
3.9.4 Pharmacy Retailing: Top-10 Pharmacy Chain Shares198
Table 3.75TOP-10 PHARMACY RETAIL CHAINS RANKED BY ESTIMATED TURNOVER, 2007/2008199
Table 3.76TOP-10 PHARMACY RETAIL CHAINS % SHARE OF ESTIMATED OTC RETAIL SALES, 2007/2008199
3.10 Electrical & Electronics Retailing200
3.10.1 Key Consumer Appliances & Electronics Retailers: Leading Revenues & Outlets200
Table 3.77CONSUMER APPLIANCES & ELECTRONICS RETAILERS IN THE CHINA TOP 100 RETAILERS LIST, 2004-2008200
Table 3.78TOP 20 CONSUMER ELECTRONICS RETAILERS, 2006-2008201
3.10.2 Key Consumer Appliances & Electronics Retailers: Gome vs. Suning201
Core Operating Revenue201
Table 3.79GOME VS SUNING: CORE OPERATING REVENUE, 2004-2008*201
Gross Profit202
Table 3.80GOME VS SUNING: GROSS PROFIT, 2004-2008*202
Operating Profit202
Table 3.81GOME VS SUNING: OPERATING PROFIT, 2004-2008*202
Store Count203
Table 3.82GOME VS SUNING: STORE COUNT, 2005-2008*203
Revenue Breakdown by Product Category203
Table 3.83GOME VS SUNING: REVENUE BREAKDOWN BY PRODUCT CATEGORY, 2004-2008*203
3.10.3 Key Consumer Appliances & Electronics Retailers: Change Ahead204
3.11 Petrol Station Retailing205
Table 3.84TOTAL NUMBER OF PETROL STATIONS IN CHINA, 2006-2008205
Table 3.85NON-FUEL BUSINESS OF PETROCHINA & SINOPEC, 2007-2008206
Table 3.86HAVE NOT BOUGHT THE FOLLOWING ITEMS AT PETROL STATION CONVENIENCE STORE, 2008206
3.12 Bookshops & Publications Retailing208
Table 3.87TOTAL SECTOR & XINHUA NETWORK BOOKSHOPS, PUBLICATIONS SALES & AVERAGE SALES PER OUTLET, 2004-2008*209
3.13 Online Retailing210
3.13.1 Online Retailing: Mobile Phones210
Table 3.88TELECOMS USAGE IN CHINA, 2006-2008210
3.13.2 Online Retailing: Internet Users210
Table 3.89TOTAL INTERNET USERS & AS % OF POPULATION IN CHINA, 2000/12-2009/06211
Table 3.90TOTAL INTERNET USERS & AS % OF POPULATION IN CHINA, 2000/12-2009/06211
Table 3.91TOTAL INTERNET USERS % SPLIT BY GENDER IN CHINA, 2000/12-2009/06212
3.13.3 Online Retailing: Online Sales212
Table 3.92PER CAPITA ONLINE SHOPPING VALUE, 2003-2008212
Table 3.93SITES PREFERRED BY ONLINE SHOPPERS, 2008212
Table 3.94CHINA INTERNET TRANSACTIONS BY TYPE, 12/2008 – 06/2009213
Table 3.95TOP 10 RETAIL ITEMS ON TAOBAO.COM, 2008213
Table 3.96AVERAGE ONLINE SHOPPING TRANSACTIONS BY REGION, 2007214
Table 3.97TOP REASONS FOR NOT SHOPPING ONLINE, 2007214
3.13.4 Online Retailing: Internet Advertising Value214
3.13.5 Online Retailing: Computer Ownership215
Table 3.98TOTAL AND PER HOUSEHOLD RURAL/URBAN OWNERSHIP OF COMPUTERS, 2002-2008215
3.14 Costs of Retail Operations215
3.14.1 Costs of Retail Operations: Outlet Rent215
Table 3.