Business and Finance

China's retail market "saturated"

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From the Financial Times, an article titled China market 'becoming saturated' (subscription required):
The window of opportunity for international retailers in China is continuing to close, as the market becomes saturated, according to an annual study of emerging retail markets by consultants AT Kearney.

China dropped from fourth to fifth place in AT Kearney's 2006 Global Retail Development Index, while India retained its position as potentially the most attractive developing market for retailers seeking international expansion.

This makes sense if you look at the variety of large retail chains in China's cities. There are two problems facing any new foreign retailer wanting to enter the China market:

- Carrefour and Wal-Mart are two of the world's monster retailers, and they both already have significant footholds in China, not to mention more specialized retailers like IKEA and B&Q, both on the march and competing for Chinese consumers' cash.

- Chinese retail chains are aggressively catching up to their foreign counterparts when it comes to management, logistics and marketing. Electronics and white goods chain Gome (国美) is a prominent example of a Chinese retail company that has learnt from Western methods but has the home field advantage when it comes to licensing issues for new stores and dealing with the complexities and mafia-like business environment of logistics, transport and distribution in China.

There are currently 2 Comments for China's retail market "saturated".

Comments on China's retail market "saturated"

The situation is even worse for convenience stores, especially in Shanghai - over capacity and over expansion. I recall reading that most of the convenience store chains in Shanghai are losing money.

I can definitely believe that about convenience stores here in Shanghai. It seems as though every block has at least 1. And squeezed in between them are many little vendors selling drinks and IP/IC cards

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