Retail

China's retail sales rose 15 percent on an annual basis in the first three quarters of 2009, with 14.8 percent contributed from urban areas (Rmb 6.1 trillion) and 16 percent from sub-urban and rural areas (Rmb 2.9 trillion), bolstered by the government's stimulus policies that spurred domestic. In 2008, China's retail industry earned Rmb 10.

9 trillion in total revenue in 2008, up 21.6 percent from 2007. Retail business China has been growing fast despite its consumption as a percentage to disposable income remains low relative to the advanced western countries. But by all indications, the trend is promising with growing purchasing power.

Retail landscape is greatly shaped by several sectors such as FMCG/Foods (Wal-mart, Carrefour, Tesco, Metro, Lianhua, Vanguard…), Restaurants (McDonald’s, KFC, Kungfu, Starbucks..) , Home Furnishings (B&Q, Home Depot…), Electronics (Gome, Suning, Best-Buy..), Apparel (Zara, H&M, Bossini, Li-Ning, Dongxiang.

), Personal Care (AS Watson, SaSa..), Convenience Stores (7-Eleven, All-Day, Kedi..) and Department Stores (Parkson, Friendship, New World…). The retail landscape is highly competitive from brands, quality, price, offerings, location, services, loyalty program and convenience etc. All three sources of players from global, regional and local are equally aggressive with stronger players squeezing out or swallowing up smaller cash-weak players.

Progresses from local players are obvious as they have hired a lot of people from multi-national rivals who bring in some good experiences. However, the high turnover of people in retail is also partly due to wrong entry strategies, or wrong portfolio bundles and services etc as shopper tastes are changing fast in China and different challenges present for companies going for big bets.

The optimal mix in terms of execution ability, traffic flow, store size, portfolio, location, image, supply chain, working capital and inventory turnover are all play a part. Our work in retail more focus on comprehensive scan of the environment to decide offensive, defensive or exit strategy, the right portfolio, price and promotional strategies, shoppers and consumers studies, execution compliance, cost and store base and location optimization and growth strategy.