Retail Industry: China To Notice More Mergers & Acquisitions

According to Ernst & Young, fresh mergers & acquisitions are projected in Chinese retail industry in future.

Ernst & Young - one of the leading consultancies in the world - added that the retail industry in China is likely to grow by 12%-13% in 2006 and the sales will reach to US$ 950 Billion.

As per Chinese Retail Revolution report, in 2005 China had totaled US$ 52.2 Billion mergers & acquisitions activities, with retail sector representing 3% of it. According to the report, mergers & consolidation inside the sector will cut fierce per head price rivalry among retailers. The report further added, a healthy economy and rapid development of the extremely fragmented retail sector is driving global & domestic firms to get over rivals.

The top 100 Chinese retail companies are accountable for only 10% of the retail industry in the country. Majority of Chinese retailers are in family-operated small businesses, often inefficient and fragmented, which keep labor cost low down by using only family labor.

Launched on September 8, 2006 the first Merger & Acquisitions regulations of China must help to raise intelligibility and boost up growth in such contracts. First time new regulation specified the use of shares for acquiring companies in China. This is a way to attract foreign takeovers. According to Ernst & Young, overseas multinational wants to do Merger & Acquisitions in China.

Ernst & Young estimated that by 2007 the retail sales would grow 14 percent in China and would reach US$ 1.1 Trillion after 12%-13% of growth in this year (2006). It's said that M & A will lead more and more rational & consolidated landscape which will allow advanced organized group to boost market share.

Related Market Research Reports:
Indian Gems and Jewellery Market - Future Prospects to 2011
Women Wear Market Forecast to 2010
Global Convenience Store Market Analysis