Online sales remain small for China's top 100 chain stores

The combined sales of China's top 100 chain stores in the past year climbed 8 percent to 2.2 trillion yuan, but challenges in developing online businesses still remain. 

The combined sales of the top 100 chain stores in China over the past year grew 8 percent to 2.2 trillion yuan (US$349 million), according to a recent report by the China Chain Stores and Franchise Association.

The total number of physical outlets also climbed 9.1 percent to 109,800 by the end of last year, and online sales of the top 100 chain stores jumped 79 percent.

Although there has been some improvement in online business for franchise stores, they still contribute a small proportion of their overall sales, totalling just 10 percent of overall income. 

Profitability has been a key issue, with logistics and delivery costs eating into income from online operations. 

Although “new retail” became a buzzword recently, there’s been a lack of investment in the digitalization efforts of physical retailers, and supply chain management capabilities are also lacking, the survey said.

Among the top 100 franchise operators, the number of department stores and shopping centers went down, while smaller scale supermarkets picked up. Top convenience store franchisers reported strong same-store growth, while hypermarkets saw year-over-year decreases in sales income. 

An oversupply of commercial property and disorders in online promotions have resulted in a disruptive scene in the retail sector, and Internet giants are seeking omni-channel operation, reflecting the latest competitive trends.  

The association also called for the continued innovation of new business formats and the enhancement of consumer experience. Developing store brands and the optimization of supply chain management will also be a priority in the coming year. 

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