China Retail Report Q3 2016 - New Study Released

From: Fast Market Research, Inc.
Published: Tue Jun 21 2016

We maintain our view that China will remain one of the most attractive retail markets in the Asia Pacific region, despite our forecast that total household spending growth will decelerate from 7.2% in 2015 to just 1.2% in 2016. We expect China's manufacturing growth to remain tepid over the coming quarters, as factories continue to destock and lay off workers amid overcapacity. Added to other indicators of a continued slowdown in the country ' s economy, including increasing rates of consumer price inflation, we expect the economic climate to take its toll on the country's retail market over the remainder of the year.

Key Views & Developments

According to the National Bureau of Statistics, China's retail sales grew by 10.1% y-o-y in April 2016, marking a further deceleration compared with 10.5% growth in March. This is contrary to China's National Development and Reform Commission forecast in December last year that the retail sales of consumer goods would continue rising at 11% in 2016.

Full Report Details at

In a bid to clamp down on cross-border commerce and encourage domestic consumption, the Chinese government introduced a new tariff policy in March 2016 that will lead to higher prices for certain product types, which could affect both consumer demand and e-commerce players ( see ' Luxury Retail, Cross-Border Specialists Most Exposed Under New E-Commerce Tax ' , April 14 2016). A number of consumer sub-sector imports are likely to be negatively affected, including luxury retail. However, cosmetics could be an area that will benefit from the new structure.

Japan-based department store and supermarket operator Aeon reported in May 2016 that while turnover in its Chinese operations increased 1.8% in 2015, net profits fell by a significant 64% y-o-y. The company attributed the fall in profits to the increasingly high cost of opening new stores in China but stated that it would open another three stores in the country by the end of 2016.

Consumer electronics giant Apple announced that it would be opening two new stores in China in June 2016 (one each in Tianjin and Shanghai), bringing its total presence in the country to 40 stores. The company opened 12 stores across China in 2015 and has five stores in total in the capital Beijing.

The China Retail Report has been researched at source and features BMI Research's independent assessment and forecasts for the retail sector. The report examines key drivers of retail sales growth and future prospects, including consumer spending and private sector investment.

BMI's China Retail Report also examines the level of development and potential for growth of the retail sector, the commercial initiatives of major players, changing consumer demographics that influence demand and the regulatory environment. Key sub-sectors include mass grocery retail, autos, over-the-counter pharmaceuticals, computers and consumer electronics.

Key Benefits

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Company: Fast Market Research, Inc.
Contact Name: Bill Thompson
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