Have you been planning to expand your retail business or open a new store offshore in Asia? One of the best places for your consideration is China. Since 1980, China has reported huge growth, with its GDP shooting from 191.1 USD to 17.7 trillion in 2022. What is more is that China’s GDP is not showing signs of slowing down and the World Bank has predicted it might surpass the US to become the largest economy by 2030.
The explosive potential presents a wave of growth that companies going to China use for faster growth and success. Therefore, you should not be left behind: this is the perfect time to take your store to China and see it grow. In this post, we take a closer look at the retail market in China, highlighting the benefits that you should anticipate. We will also highlight what you should do to make your firm successful.
A Closer Look at the Retail Market in China
In 2021, China was one of the top retail markets on the globe. In the same year, China generated revenue of approximately 6.5 trillion U.S. dollars. E-commerce has accelerated rapidly following the outbreak of COVID-19, which limited the regular movements of customers into physical stores. In one of the studies done in 2021, Chinese customers increased their online shopping usage by about 50%.
As one of the largest global retail markets, China remains highly competitive with offshore investors considering it as the first destination. One fact that you need to appreciate about the Chinese retail markets is that a lot of buyers have shifted their preference to local products. Therefore, it is prudent to focus on delivering high value propositions.
Why Now is the Best Time to Open a Retail Store in China
The numbers we have highlighted above show that China is a high potential market. You only need to use the right approach and strategies. Here are other reasons why China is an excellent jurisdiction for your company.
- China has a Large Population
When you set off looking for a business location, the first thing that you should check is the demographics of the targeted customers. China has a large population that is outgoing, especially if you offer high-value products. This fact is what has made top retail brands to target having a huge presence in the country’s cities and your store should not be left behind.
- The Country Allows 100% Shareholding by Foreign Companies
The type of company that you open in China will greatly determine the manner of operations. Although there are different types of business vehicles in China, the best is a wholly foreign-owned enterprise (WFOE) that allows 100% foreign shareholding. This means that you will be fully in-charge of the decisions for running the company. Hiring the best staff and retention strategies will also be within your ambit, allowing you to act promptly and give customers the best experience.
- China is Strategically Located
Retail stores today are borderless, implying that you are free to take advantage of cross-border markets. Because of its strategic location, China offers you the perfect opportunity to also reach and exploit the neighboring Macau, Taiwan, Malaysia, Japan and other markets in the neighborhood. With a good strategy, you are sure to reach out to the entire APAC market for faster business growth.
If you want to be successful in the retail market, it is prudent to keep exploring new markets and changing your strategies. Adrian Cheng, the new General Manager of the World Development Center in Hong Kong, opted for a differentiation strategy when opening the Art Mall in Wuhan. He targets to open K11 projects in ten cities in Mainland China by 2025. You, too, can get it right in China with the right strategies.