Shanghai skyline

China’s economy is expected to grow 6.3 per cent in 2016 and 6.0% in 2017, quite a contrast with the growth figures realised in recent years and primarily reflecting weaker investment growth as the economy continues to rebalance.

Although the economy is slowing down, the figures are still more than impressive: in comparaison global GDP growth is expected at 3.4% in 2016 and 3.6% in 2017.

The following table shows the most important economic and demographic data over the past years, including a forecast for 2016.

 

2014

2015

2016 (f)

AveragePopulation (million)

1,369

1,376

1,383

Households (million)

440

456

463

Male/Female %

51.2/48.8

51.2/48.8

51.2/48.8

Population 15 – 64 years %

73.4

73.6

73.8

Urban Residents %

54.8

56.1

57.4

GDP Growth %

7.3

6.9

6.3

GDP p/c PPP  USD

13,327

14,339

15,424

Disposable Income p/c USD

3,361

3,615

3,890

Average Annual Inflation %

2.0

1.4

2.1

  1. Sources: IORMA research, eMarketer, CIW, IMF and others
  2. p/c = per capita – PPP is Purchasing Power Parity

In 2016 China will be the biggest retail market

Total retail sales across the globe will reach over US$22 trillion in 2016 and $27 trillion in 2020 according to eMarketer. According to IORMA research, total retail sales in China will reach US$ 5.1 trillion this year, bypassing the U.S. to be the largest retail market in the world.
China’s retail market has developed significantly in a short period of time: Since 2008 total retail sales have tripled to an estimated 33 trillion this year. This staggering increase was and is fuelled by rising wages, increasing disposable income and rapid urbanisation contributing to consumers demanding more quality products and services. While this creates further opportunities for major retailers, it also presents many challenges as the market becomes increasingly saturated and competitive.

Online Shopping

At the moment China is the world biggest online market. By the end of 2016 an estimated 720 million people will have access to the internet, more than triple the number in 2008. The country’s total number of mobile Internet users will jump to 630 million, more than FIVE times the number in 2007. Total online retail sales, including B2C and C2C e-commerce,  are to reach 5.1trn RMB (USD 803bn) at the end of 2016, a growth of 33% (in local currency). B2C only is forecasted to grow to USD 474 million, a share of 59% in online retail  shopping. To compare; US B2C online retail is forecast to reach USD 390bn this year, a growth of 14%.

Heading towards an omni world

It is expected that in the coming years China’s retail industry will further integrate their online and offline efforts. It will be just a matter of time for traditional shopping malls and flagship stores to provide the whole range of their products through e-commerce platforms and mobile applications. Following similar trends in Europe and the USA mobile will enable in-store pickups to better take advantage of the merits of both online and physical retail.