China's retail industry at turning point: PwC

Imaginechina

Professional Services Network PwC estimates that China’s overall retail sales will reach US$6.77 trillion in 2019.

E-commerce retail sales will increase 21 percent from a year ago to US$1.25 trillion, with overall retail sales growing 9 percent.

China's overall online retail transactions on Singles Day, November 11, this year hit a new record high of more than 300 billion yuan (US$43.14 billion), according to the Ministry of Commerce.

But growth will plateau in the coming years.

"China’s e-commerce sector has posted remarkable achievements as it drives global development," said Jennifer Ye, PwC China Consumer Markets Leader. "Chinese Internet giants are leveraging their own capital and technological advantages to create retail ecosystems, consolidating offline spaces and upstream and downstream industries to maximize their competitive edge."

The report says that China’s retail industry is facing a new turning point due to the digital impact.

Improvement in the whole value chain and the adoption of digitalization measures through every step of the businesses will revolutionize the business.

"If traditional enterprises want to navigate through the revolution, they must adopt digitalization ranging from front-end marketing, sales channels as well as back-stage product development and supply chain," added Phil Lai, PwC China Consulting Director.

According to the National Bureau of Statistics, China’s online retail sales amounted to 7.05 trillion yuan from January to October, up 25.5 percent year on year.

Online retail sales of physical goods hit 5.411 trillion yuan, marking an increase of 26.7 percent. 

The PwC study, which covers over 22,000 online shoppers in 27 countries and regions, showed that Chinese consumers are much more willing to share data and have high expectations they will receive a personalised experience because of it.

A total of 59 percent of the Chinese respondents in the report survey said that they are “happy for a retailer to identify when I am nearby and send me personalised offers,” while 61 percent of the Chinese respondents said that “I am comfortable for a retailer to monitor my shopping patterns and purchases.”

In comparison, only 29 percent and 34 percent of the American respondents agreed with the statements.