An overview of China’s Country Report by China General Chamber of Commerce, the author of this article from RGM Retail on behalf of Malaysia Retailers Association (MRA)
In 2016, facing the international environments of world economy still in the deep adjustment period, the counter-globalization trend rising, the slow growth of world trade and the international financial markets rise of inverse slow growth, the severe vibration of international financial markets, as well as the domestic situation of the economic development entry into a new norm and arduous tasks of reform and development, China adhered to the main line of pushing forward the structural reform of the supply front and modestly expanded its aggregate demand. China’s economy maintained a smooth running trend in general.
The quality of economic growth improved and the market sales increased rapidly. In 2016, China’s GDP reached 74412.7 billion yuan (US $11.2 trillion), an increase of 6.7% over the previous year. In the first half of 2017, the GDP was 38149 billion yuan (equivalent to US$5.7 trillion), at comparable prices an increase of 6.9% over the same period of 2016.In 2016, the total retail sales of consumer goods reached 33231.6 billion yuan (US $5 trillion), an increase of 10.4% over the previous year. In 2016, the total sales of China’s “Top 100 Retailers” reached 4.82 trillion yuan (equivalent to US$700 billion), an increase of 18.5%.
Consumption ensured a greater contribution and the service industry’s proportion in the economic growth further increased. In 2016, the contribution rate of final consumption to economic growth was 64.6%, up 4.9 percentage points than that of the previous year and 22.4 percentage points higher than the contribution of capital formation’s total amount. The situation of economic growth too much dependent on investment has changed to some extent. In 2016, the added value of the service sector grew by 7.8% over the previous year, 1.1 percentage points higher than the GDP growth, accounting for 51.6% of the GDP, up 1.4 percentage points higher than that of the previous year.
The Internet economy enjoyed a fast development. In 2016, the Internet penetration rate reached 53.2%, and online retail sales increased by 26.2% compared with the previous year, 15.8 percentage points higher than the increase of retail sales of consumer goods. The express delivery business volume reached 31.28 billion.
In the first half of 2017, the online retail sales reached 3107.3 billion yuan (US$500 billion), an increase of 33.4% over the previous year, including the online retail sales of physical goods being 2374.7 billion yuan (equivalent to US$400 billion), y-o-y increase of 28.6%, accounting for 13.8% of total retail sales of consumer goods, up 2.2 percentage points.
The income of residents increased steadily, and the Engel coefficient continued to decline. In 2016, the residents’ disposable income per capita was 23821 yuan (equivalent to
US$3586.3), representing an actual increase of 6.3% over the previous year, higher than the per capita GDP growth rate by 0.2 percentage points. In 2016, the Engel coefficient of the national population was 30.1%, down 0.5 percentage points over the previous year, close to the United Nations’ standard of prosperity from 20% to 30%.
At present, China’s retail industry shows the characteristics of steady sales growth, mature, rather mature development of online retail, enhancement of brick-andmortar stores’ digitization, upgrading commodity structure, fast forwarding of brand chain operations, more multiplying more efficient payment methods. We forecast 5 trends for the future development: the new pattern’s formation of integration of online and offline accelerates, multi-format crossborder collaboration will be highlighted, the model of socialization and scenarization becomes the mainstream, intelligent and efficient supply chain system is restructured, the industry’s transformation and upgrading speeds up.
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