China Retail Market by Product, and Distribution Channel - Forecast and Analysis 2023-2027

China Retail Market Forecast 2023-2027

The China retail market is estimated to grow by USD 1,207.55 billion at a CAGR of 8.64% between 2022 and 2027. The premiumization of products, driven by changing consumer preferences and the desire for higher-quality products, is driving market growth by increasing the demand for premium products across various industries. The growing popularity of private-label brands, driven by factors such as increased trust in retailer brands and the ability to offer competitive prices, is also boosting market expansion by increasing the market share of private-label products. Additionally, value-added services, such as customization options and after-sales support, are driving market growth by enhancing the overall customer experience and creating additional revenue streams for businesses.

It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.

What will be the size of the Market During the Forecast Period?

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Market Segmentation

This market report extensively covers market segmentation by product (food and beverages, apparel and footwear, home improvement, consumer electronics and appliances, and beauty and personal care), and distribution channel (offline and online).

By Product

The market share growth by the food and beverages segment will be significant during the forecast period. The Chinese economy's largest sector in terms of financial gain and employment opportunities is the food and beverage industry. The size of the industry participants varies, and multinational corporations produce a lot of fast-moving consumer goods (FMCG). Dairy, beef, wine, grains, fruits, and vegetables are a few of the products in this category that are experiencing high growth. The market is also expanding because there are numerous supermarkets that sell reasonably priced organic food items. 

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The food and beverages segment was valued at USD 721.51 billion in 2017. All social classes have an equal need for food, but they choose different retail formats from which they buy these goods. Convenience stores are preferred over hypermarkets in third and fourth-tier cities and by lower-middle-class consumers, whereas hypermarkets are more concentrated in first-tier cities, where most purchases are made by upper and middle-class consumers. Furthermore, in China, packaged non-genetically modified food is becoming popular. Scientists have noted numerous health and environmental risks associated with GMO food products, and as a result, consumers are gravitating more and more toward non-GMO food products. Demand for non-GMO food products has increased as a result of Chinese consumers' growing health consciousness and concern over their diets. Hence, all these factors will fuel the market segment growth during the forecast period.

Market Dynamics and Customer Landscape

The market is evolving rapidly, driven by Internet Giants and changing consumer habits. Both rural and urban households are increasing their spending due to rising Disposable incomes. Online shopping, fueled by smartphone penetration, is reshaping the sector, with e-commerce channels and IoT technologies gaining ground. Augmented reality is enhancing the shopping experience, blurring the lines between brick-and-mortar stores and online platforms. The retail e-commerce market is expanding, especially in categories like fresh groceries and prepared food delivery. Retailers are focusing on mobile-first sites, offering personalized services, and improving return and exchange policies to cater to the needs of modern consumers. Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.

Key Market Driver 

The growing popularity of private-label brands is notably driving market growth. Retailers all over China are increasingly focusing on private-label products. To increase their profitability, retailers are offering a variety of consumer goods under their private-label brands. As a result, the retail market in China is expanding. Major retailers are capitalizing on the rising customer demand by introducing a portfolio of packaged foods, drinks, and personal care items. This trend is fueled by increasing consumer spending and the growing retail market, particularly through the online shopping and e-commerce channels. Factors such as smartphone penetration, the integration of IoT and augmented reality technologies, and the continued relevance of brick-and-mortar stores are also shaping this market.

Prices for private-label goods are lower than those for branded goods. Customers who care about price are, therefore, more likely to buy private-label goods. Retailers, like supermarket chains, have started giving private-label products more shelf space and are conducting internal marketing and promotional campaigns. As a result, it is anticipated that private-label brand demand will rise, which will, in turn support the expansion of China retail market in terms of volume sales during the forecast period.

Significant Market Trends

Innovation in in-store retailing is an emerging trend in the market growth. The personalization of services for customers in in-store retailing has been strengthened by digitalization. To compete with online subscription models provided by e-commerce companies like Amazon, which allow customers to stock up on repeat purchases, the majority of supermarket and hypermarket chains in China must go online. In-store retail, which encourages customers to browse in person to supplement their daily needs with a few high-end purchases, can nevertheless use the same concept.

Retailers are using innovative methods to interact with their in-store customers. Customers can easily find the items they want to buy in-store with the aid of in-store innovation concepts that make use of mobile applications. Additionally, built-in touch screens in changing rooms enable customers to virtually try on wearables like clothing and footwear, and self-checkout terminals reduce the need for lengthy lines. These factors will all contribute to the China retail market expansion during the forecast period.

Major Market Challenge 

The high competition from unorganized retailers is a major challenge impeding market growth. For well-established retailers in the China retail market, fierce competition from unorganized retailers presents a significant challenge. Unorganized, high-volume retailers that are not registered with the government compete fiercely with well-established retailers in China's market, especially in the food and beverage and apparel sectors. These unorganized retailers have erratic hiring policies and product selections. These companies provide goods that are comparable to those provided by the nation's organized companies. The two factors that distinguish organized from unorganized retailers are price and branding.

Small businesses that specialize in a single product category (typically private-label brands) and individual Chinese product suppliers are among the participants active in the market. Prices and product quality affect how organized and unorganized retailers compete. Price, quality, brand recognition, and customer service are the main areas of competition for market companies. Moreover, the majority of unorganized retailers use low prices to attract customers, but they often skimp on quality because they have low overhead and investment needs. Therefore, these factors will hamper the growth of the China retail market during the forecast period.

Key Market Customer Landscape 

The report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.

Global Retail Market in China Customer Landscape

Who are the Major Retail Market Companies in China?

Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.

Beijing Dangdang Kewen Electronic Commerce Co. Ltd. - The company offers various products such as books, beauty and personal care, home, lifestyle, baby, children, and maternity products. The key offerings of the company include department stores, shopping malls, outlets, large stores, supermarkets, convenience stores, and specialty retail formats.

The report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:

• Alibaba Group Holding Ltd.
• CK Hutchison Holdings Ltd.
• GOME Retail Holdings Ltd.
• JD.com Inc.
• Lotte Corp.
• PetroChina Co. Ltd.
• Sun Art Retail Group Ltd.
• Vipshop Holdings Ltd.
• Walmart Inc.
• Yonghui Superstores Co. Ltd.
• Quanlian Industrial Co. Ltd.
• President Chain Store Corp.
• Pinduoduo Inc.
• E Mart Co. Ltd.
• DFI Retail Group

Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.

Segment Overview

The market report forecasts market growth by revenue and provides an analysis of the latest trends and growth opportunities from 2017 to 2027. 

• Product Outlook 
  • Food and beverages
  • Apparel and footwear
  • Home Improvement
  • Consumer electronics and appliances
  • Beauty and personal care

• Distribution Channel Outlook 
  • Offline
  • Online

Market Analyst Overview

The market is dynamic, driven by the rapid growth of the e-commerce channel and increasing demand for fresh groceries and prepared food delivery. Final consumers are embracing online shopping for personal and household use, shifting away from traditional physical stores. This trend has prompted manufacturers and wholesalers to adapt their activities to meet online demand. With a wide range of products, including jewelry, home appliances, beauty and personal care items, and more available, online retail platforms are thriving. Advancements in technology, such as smartphones, tablets, and e-commerce applications, have further facilitated this growth, offering immersive shopping experiences through virtual reality and artificial intelligence-powered features.

The market is characterized by a diverse range of offerings, including fresh groceries and prepared food delivery services, catering to the evolving needs of consumers. Personal use items such as beauty products, personal care products, toys, stationery, and pet supplies are widely available both online and in stores. Customer support and return policies play a crucial role in ensuring customer satisfaction and loyalty. The retail sector in China contributes significantly to economic growth, providing jobs and fostering social interaction. With the rapid growth of the e-commerce industry, global retailers are expanding their product ranges and enhancing the online shopping experience with features like virtual try-on and personalized recommendations powered by artificial intelligence. Consumer data is leveraged for targeted promotional and branding activities across various platforms, including social media, discount offers, and television commercials.

Retail Market Scope in China
Report Coverage	Details
Page number	135
Base year	2022
Historic period	2017-2021
Forecast period	2023-2027
Growth momentum & CAGR	Accelerate at a CAGR of 8.64%
Market growth 2023-2027	USD 1,207.55 billion
Market structure	Fragmented
YoY growth 2022-2023(%)	6.65
Competitive landscape	Leading companies, Market Positioning of companies, Competitive Strategies, and Industry Risks
Key companies profiled	Alibaba Group Holding Ltd., Beijing Dangdang Kewen Electronic Commerce Co. Ltd., CK Hutchison Holdings Ltd., GOME Retail Holdings Ltd., JD.com Inc., Lotte Corp., PetroChina Co. Ltd., Sun Art Retail Group Ltd., Vipshop Holdings Ltd., Walmart Inc., Yonghui Superstores Co. Ltd., Quanlian Industrial Co. Ltd., President Chain Store Corp., Pinduoduo Inc., E Mart Co. Ltd., DFI Retail Group, China Resources Enterprise Ltd., Bailian Group, and Suning.com Co. Ltd.
Market dynamics	Parent market analysis, Market Forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period.
Customization purview	If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized.

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What are the Key Data Covered in this Market Research Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the market growth and forecasting of the market between 2023 and 2027
• Precise estimation of the market size and its contribution to the parent market
• Accurate predictions about upcoming market trends and analysis and changes in consumer behavior
• Growth of the market across Europe, North America, APAC, South America, and Middle East and Africa
• Thorough market growth analysis of the market’s competitive landscape and detailed information about companies
• Comprehensive market analysis and report on the factors that will challenge the market research and growth of market companies

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