China Retail Sales to Post 16% Growth in 2010

 

According to Wang Bin, an official in the market operation department of the Ministry of Commerce, retail sales in China are projected to surge by 16% in 2010 with strengthening domestic demand continuing to be the focus of the government policy, as per the news published by Reuters on October 28, 2009.

 

This anticipated 16% growth in retail sales is by large following similar growth patterns posted by China in previous months. The retail sales in the country were RMB 8.97 Trillion during January-September 2009, representing a YoY increase of 15.1%, as per the statistics from the National Bureau of Statistics.

 

This growth level might have reached 17%, up 2.8% from the period spanning from January to September 2008, if the effect of price change is deducted.

 

In total, the urban retail sales summed up to RMB 6.1 Trillion during the same period, a 14.8% increase from a year earlier. The retail sales in areas at or below the country level reached RMB 2.87 Trillion, a 16% YoY increase.

 

Wang Bin added that the demand in the country could expand to a great deal. However stimulus policies like those promoting car sales in the rural market are not certain to continue in 2010, but escalating demand in the domestic market is poised to be a crucial aspect of macro policy.

 

In the meantime, China witnessed a decline in sales in 2008 as a result of global financial meltdown. Although the customers did not eliminate their expenditure completely, still the consumption structure has got heavily affected. Due to a slump in consumption capacity, a portion of high-end consumers is, in particular, shifting to middle and low-end segment.

 

Consequently, an increment in the sales/output of middle and low-end segment is expected in such an environment. To meet the requirements of these new consumers shifting from high-end, the middle and low-end brands are likely to make more efforts to enhance their product development, and thereby making their product worth purchase.

 

According to a Research Analyst at RNCOS, “As the stimulus is taken back, stability in the growth rate of Chinese retail industry is expected to come mainly from the boosting consumers’ spending, private sector, and eventually from the renewed demand for the country’s exports.”