As one of the first few sectors opened to foreign investment after China’s WTO accession, the country’s retail sector has witnessed booming growth with the influx of foreign retail giants. More than half of the world’s top 50 retailers have entered China, most started by opening stores in Beijing, Shanghai and other big coastal cities. For these companies, China's second and third tier cities are attractive for future growth. According to the China General Chamber of Commerce, retail sales are expected to grow by 15% in 2013.
The China’s retail sector is growing drastically due to the following reasons:
Establishment of supportive government policy
Increase of disposable income and consumer purchasing power
Higher standard of living
Booming rate of urbanization
Competition in the retail sector is intense. Although the retail market is still dominated by domestic brands, foreign brands have made significant inroads, and are particularly popular with younger generations.
U.S. Position in the Market
Despite the restrictive business environment, some U.S. retailers have established strong footholds in China. Wal-Mart, for example, has successfully opened retail establishments in many cities with over 300 stores in China. Most retail outlets in large urban centers such as Beijing and Shanghai stock U.S. branded products. However, these retailers are also starting to expand to the other major cities away the coastline.
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China Chain Store and Franchise Association
Tel: (86-10) 5191-6555
Fax: (86-10) 5191-6856
Ministry of Commerce
Foreign Investment Administration
Tel: (86-10) 6519-7327/7301
Fax: (86-10) 6519-7322
The U.S. Commercial Service offers a broad array of market entry services to U.S. companies in the retail sector. Please refer to the following relevant contacts for additional information on how we can help you expand your business in China.