Xin Ou
Research expert covering Greater China
Retail industry in China - statistics & facts
China is one of the leading retail markets in the world. In 2023, the country generated a retail sales revenue of over 47 trillion yuan, showcasing a robust year-over-year increase. That year, rural and urban households continued to witness steady growth in disposable incomes. However, consumer confidence in China remained low compared to the pre-pandemic period.
Online retail capturing market share
The rampant COVID-19 pandemic brought profound changes to China’s retail landscapes, with e-commerce growing increasingly crucial in China’s retail industry. In particular, live commerce has taken the lead amid the pandemic and successfully maintained its position afterward. Douyin, the most popular livestreaming platform in China, experienced skyrocketing growth in gross merchandise volume in the previous years.Heated competition on the physical field
Physical retailers in China are encountering stiff competition. On the one hand, e-commerce has been taking over the retail market; on the other, a price battle is underway in the offline market, squeezing the profit margins of most players. In general, convenience stores and membership supermarkets managed to stay profitable thanks to their high foot traffic and membership fees, respectively. However, most of the traditional supermarkets recorded a huge net loss in 2023, and dozens of them closed within the first quarter of 2024. To survive the competition, many supermarket brands have launched their private labels, to gain better control of product quality, differentiate product offerings from their rivals, build customer loyalty, and most importantly, increase profit margins.A way to cross the border between online and offline
China’s mature logistics network has enabled the development of a new retail mode, the so called online-to-offline (O2O) retail businesses. During the pandemic period, O2O commerce underwent swift expansion. One of the fastest developing subsets of O2O commerce was quick commerce (also known as “q-commerce”), which provides instant/on-demand delivery of online orders within 30 to 45 minutes. In addition, more and more e-retailers and physical retailers have integrated VR and AR techniques to enhance the immersive shopping experiences of consumers.
