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China

International Retailers’ Share Expected To Expand

Foreign retailers account for about 3 percent of total consumer sales in China today, but this number is expected to rise to 10 percent by 2005. USMEF-Hong Kong sources predict that 3-5 international retailers will eventually control 50 percent of the domestic retail market. China is expected to overtake the United States as the largest recipient of direct foreign investment (DFI) in 2002. DFI into China this year is likely to hit $50 billion, while DFI in the U.S. is expected to fall from $124 billion in 2001 to $44 billion this year. China’s gross domestic product (GDP) grew 7.9 percent during the first nine months of the year; third quarter growth accelerated to 8.1 percent. Total foreign trade this year is expected to hit US $600 billion, an 18 percent increase over last year.  There are now more than 1,000 retail businesses in China with turnover of more than $12 million per year, but the top 50 firms account for just 5 percent of the market.  Although many of China’s retailers have big plans to develop, the largest chain, Lianhua, has total sales of just $1.75 billion. After many delays, China’s largest mall has opened in Pudong Shanghai.  The Super Brand Mall, a $450 million project largely financed by Thai conglomerate Charoen Phokpand, boasts 10 floors, 1,000 outlets and over 241,000 square meters of shopping space.