The rise of domestic retail chains
China has long been a desirable market for leading international chain retailers, owing to its vast consumer base and its surging economy. In the 1990s, a number of global retail corporations have entered the Chinese market, including Walmart, Metro, and Carrefour. The number of foreign-funded retail chains in China exploded after China became a member of the World Trade Organization (WTO). In 2005, over 1,000 foreign-owned retail enterprises opened in China, more than tripling the number from the previous decade.The soaring consumer market in China also accelerated the development of domestic retail chains. Nowadays, the populous country is home to a growing number of chain stores, ranging from shopping malls to convenience stores. Chinese retail chains performed strongly in recent years and are ambitious to conquer a larger share of the market. In 2019, the retail giant Suning.com acquired Carrefour China, while Metro sold its majority stake in the country to Wumart, a local retailer.
Challenges and opportunities
As a result of the nation’s proliferation of e-commerce, China’s chain retailers have faced challenges as never before. In 2011, retail chains in China contributed to nearly half of the country’s retail revenues, while in 2021, the share plunged to around a quarter.China’s chain store operators took on transformative journeys towards digitalization and smart retail in the face of change. Nowadays, a growing number of department stores have initiated omnichannel businesses, including WeChat retail, live streaming shopping, and group buying. On the other hand, Chinese chain retailers also adopted more technology elements in their physical stores, including installing self-checkout systems, facial recognition technology, and interactive displays. Over 60 percent of the retailers that increased their technology adoption reported positive impacts on customer flows and sales value.
