China is now Asia’s largest retail economy, with $1.7 billion expected for 2013, reports Inside Retail Asia. It has been the beacon for Western brands looking to set up shop on the continent.
According to Annie Lei, national director of China consulting at Cushman & Wakefield, Beijing, Shanghai, Shenzhen, and Guangzhou have the wealthiest and most brand-conscious consumers. First-tier cities show retail growth of 9 to 16 percent. And second-tier cities including Chengdu, Wuhan, Nanjing, Shenyang, and Chongqing exhibit growth between 13 and 17 percent. “Overall, we expect a steady rise in income levels to nurture an aspiring middle class population and, barring any economic surprises, this should underpin balanced retail growth for the next decade,” Lei said.
Location is key to defining a brand, and attractive real estate is in great demand. The most popular sites are Shin Kong Place in Beijing, Grandview Plaza Guangzhou, and MixC Shenzhen, which have achieved annual sales of $1 billion. That figure continues to grow.
“The retail growth story in Asia, especially in emerging markets like China, is real and likely to continue over the longer term. Though near-term growth has shifted to a lower gear, long-term prospects remain intact given solid economic growth and relatively favorable demographics, especially in growth markets in South and Southeast Asia,” said Randall Hall, executive MD of Greater China at Cushman & Wakefield.
A study produced by Altagamma and Bain forecasts that luxury sales growth for China will be between 6 and 8 percent for 2013. Growth for 2012 was 20 percent. Despite a projected slower luxury market this year, Chinese consumers’ appetite for luxury remains unabated and is expected to only become more sophisticated.
image credit: ivan walsh