Aug. 23 – According to the 2013 Global Retail Development Index (GRDI), a study by the management consulting firm A.T. Kearney, China ranks fourth globally for retail development. Meanwhile, India’s retail development ranking fell nine spots from the 2012 GRDI to fourteenth overall after experiencing backlash from the global economic slowdown. A comparison of India and China’s retail sectors reveals some lessons for retailers in both markets.
China’s Continued Retail Development
China dropped in this year’s rankings from third to fourth, but it has not lost its strong attractiveness as a priority destination for the world’s retailers. China is experiencing double-digit sales growth in addition to continually increasing consumer demand.
Notably, small and medium sized retail outlets are becoming more popular in China as they accommodate the Chinese consumers’ demands for low-priced offerings in a format that caters to Chinese shopping habits. This trend is highlighted by grocery shops such as Hong Kong-based PARKnSHOP who entered China with plans to open 300 mid-sized supermarkets in the coming years. Similarly, Wal-Mart has also begun operating convenience stores throughout China as a part of its long-term strategy. Sun Art Retail Group, which operates small grocers in China, achieved a 14.3 percent increase in revenue in 2012 as a result of its aggressive expansion.
A growing trend in China is the addition of malls to the retail culture. The country currently boasts 3,100 malls and saw an increase of nearly 300 in 2012 alone. The majority of these malls were opened in China’s 2nd and 3rd tier cities where massive retail opportunities still exist to target millions of consumers.