Multinationals plan to open more physical store outlets
Multinational corporations are making plans for physical store expansions in China, given the favorable consumer sentiment and the return of foot traffic to offline locations.
According to executives and industry experts, the fundamentals of the consumer goods market remain unchanged, and a steady rebound is expected in the coming year.
Shoppers at a LEGO store in Jing'an District. The company plans to add 80 new retail stores in China this year.
LEGO Group, the Danish toy manufacturer, has announced plans to add another 80 retail stores on the Chinese mainland this year.
Last year, more than 90 LEGO stores were opened in China, accounting for nearly two-thirds of the total 155 new stores launched globally.
"I've been encouraged by positive signs in January and February as traffic and consumers come back into stores," said LEGO Group CEO Niels Christiansen, adding it will continue to expand the factory in Jiaxing of neighboring Zhejiang Province and the supply chain capability.
"Our commitment to China won't change, and we still feel optimistic about the market potential here," added Paul Huang, senior vice president of LEGO Group and general manager of LEGO China.
He said that a strong signal from the authorities to stimulate domestic consumption has been encouraging for the market. Currently, more than 40 percent of LEGO's brand retail stores are located in tier-3 and lower cities, which have enormous development potential.
The toy retailer's new offerings with Chinese elements were also a success, with the new "Money Tree" set released ahead of this year's Spring Festival becoming the best-selling item in China within the first month of release.
"Many multinationals continue to see China as the best consumer story in the next decade, given the rising middle class and rising disposable income," said David Zehner, head of Bain's Asia-Pacific Consumer Products practice.
He anticipates that the recovery will be led by a rapid rebound in services and fast moving consumer goods, with spending on these sectors as well as durables expected to return to pre-pandemic levels this year, driven by out-of-home demand.
At the same time, he noted that they must pay attention to structural changes such as demographic shifts and government policies.
In a recent survey conducted by the American Chamber of Commerce between October and November of last year, 45 percent of the 319 firms ranked China as a top-three investment priority in their near-term global investment plan.
Many multinationals continue to see China as the best consumer story in the next decade, given the rising middle class and rising disposable income.
Walmart's Sam's Club is finalizing plans for a new store in Putuo District in the coming months.
This will be the fifth Sam's Club membership store in Shanghai, following the retail chain's most recent opening in the city's Baoshan District last summer.
In the fourth quarter of last year, Walmart China achieved a net sales growth of 13.5 percent and comparable sales growth of 13.3 percent. This was fueled by strong e-commerce sales during the quarter, which increased by 70 percent and accounted for 48 percent of total net sales.
Last year, it accelerated its expansion in China by opening six new Sam's Club locations as the member fee-based model gained traction, the most since Walmart entered the country more than two decades ago.
