China Retail Market: Growth, Impact of COVID-19, and Key Facts

China retail market is sizable and growing rapidly, Supermarkets, department stores, and specialty stores all saw a rise in sales in 2019, with the nominal growth rate of total retail sales of consumer goods in China being 2% higher than the real growth rate of 6% crossing CNY 41.0 trillion mark. In total, China's domestic consumption accounts for close to 55% of the country's GDP.

Impact of COVID-19

However, in 2020 the pandemic caused a sharp slowdown in consumption in the first few months, which then began to recover in the second half of the year, albeit more slowly than industrial production, after showing signs of improvement starting in August. consumption at the top end and sales of luxury items, vehicles, and houses.

Moreover, with the easing down of COVID-19 restrictions and In terms of purchasing power parity (PPP), China is the second-largest consumer economy. For full year 2022, the consumption declined owing to the impact of COVID-19 and as a result of declining income. The most significant area of personal consumption, the services sector, was severely damaged by the pandemic.

Despite the decline in retail sales, consumers' fundamental requirements were being fulfilled, which led to an increase in sales of pertinent goods. There were 253,000 convenience stores on the Chinese mainland in 2021, an increase from 132,000 in 2019.

Market by Geography

Shanghai continues to be China's top consumer market due to its big retail industry and high wealth concentration. Due to high proportion of youthful consumers, robust growth in tourism and retail sales, and overall ranking, Chongqing also scores ranks among top cities.

In 2021, retail sales of consumer products in Beijing essentially returned to their level from before COVID-19. Additionally, The consumer market in the Chengdu-Chongqing area is appealing and full of potential.

Key Facts

• In China, there are 853 million mobile payment users, or 86.5% of all mobile phone users. Around 1.17 billion individuals worldwide utilise mobile payments, with Chinese users making up an astounding 72.9% of all mobile payment users worldwide.
• China is home to the world's largest e-commerce market, with more than half of the global e-commerce transactions taking place in the country.
• According to the most recent official data, smartphone sales in China fell 22% in the first 10 months of 2022. China is the industry's largest market, but it has been plagued by a decline in domestic demand and unrest in its manufacturing supply chain.
• China's smartphone sales experienced a record decline in 2022, falling 13% to their lowest level in ten years as COVID regulations and a slowing economy dampened consumer demand.
• In the past year, 77 merger and acquisition (M&A) deals - both pending and completed were reported in the retail and wholesale sectors of China, with a combined deal value of more than USD 4,531 million.
• The percentage of retail sales of tangible items made online has increased from 20.7% in 2019 to 27.1%.

Find out more:- China Retail Industry Forecast 2028: Analysis of Online and Offline Retail Trends - Second Edition

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