Foodsectornews.com - China Shows Phenomenal Growth In Food Retail Sector

China Shows Phenomenal Growth In Food Retail Sector

Wednesday, 20 June 2007

Over the past 10 years, the Chinese retail food industry has shown a phenomenal growth. The share of its retail food sector is expected to rise by 50% by 2012

As per the reports released by IGD (institute of grocery distribution), the retail market of China will be the second largest food retail market by the fiscal year 2020, following US. The news published on Bangkokpost, the Chinese food market that accounted for only 35% of the size of the US market in 2003, will account for 82% in 2020.

With the increase in the income of the Chinese consumers, the preferences and tastes of these consumers are also changing in terms of quality, convenience, and safety in the food that they consume. Consumers belonging to high-income groups are becoming more demanding in the quality of the food that they consume, and this has in turn motivated growth in the China food retail sector.

The steady economic growth and urbanization has contributed a major share in the development of the food retail sector. The increasing number of food retail stores offers a wide variety of food items to the consumers in urban markets that are usually overcrowded and multifaceted. However it has opened new avenues for the retail markets.

World’s biggest retail store operators like Wal-mart, Carrefour, metro and Tesco are involved in the purchase and sell business with china. Wal-mart carries out a highly profitable business in china. The procurements that Wal-mart obtains from china are so high, that it has already crossed the gross national products of many countries.

With the incoming of the foreign markets in the Chinese food market, the domestic food market of china was left with no other option but to incorporate foreign product designs, quality standards and marketing strategies to suit the tastes of the domestic consumers. This revolution that occurred in the Chinese food market has influenced the food products in the modern retail food market, which in turn, has significantly influenced the consumer behavior in China.

Industry experts said, that with the increase in the number of supermarket stores in china, the total share of retail sales was also expected to increase by 2% i.e. from 10% to 12% in the year 2002, and up to 50% in the year 2012.

As per a research analyst at RNCOS, “Over the past 10 years, the Chinese food industry has experienced a creditable structural change and has shown tremendous growth. This drift in the retail food sector was present all over china, especially in Shanghai, Guangzhou, Dalian and Beijing”.