BEIJING - Emerging results from 2005 show China's major retail enterprises
playing an increasingly important role in the economy, with different operating
models such as chain stores and convenience stores growing rapidly.
According to a survey conducted by the Ministry of Commerce, sales of China's
top 30 chain-store enterprises totaled 491.04 billion yuan (US$61 billion) in
2005, an increase of 30.9% over the previous year. The number of shops operated
by the top 30
reached 16,665, up 20.7%. In terms of different types of retail stores, sales
by regular chain shops hit 409.96 billion yuan, accounting for 86.9% of the
total.
Shanghai
Brilliance (Group) Co Ltd led the top 30 retailers, with sales hitting 72.07
billion yuan and the number of outlets reaching 6,345, rising 7.2% and 15.4%
year on year, respectively. It was followed by
Beijing Gome Home Electric Appliance Co
Ltd, the Suning Electric Appliance Group, the Dashang Group and the Beijing
Hualian Group Investment Co Ltd, with sales standing at 49.84 billion yuan,
39.72 billion yuan, 30.12 billion yuan and 20.80 billion yuan, respectively.
Four main trends were visible for the top 30 retail enterprises in 2005.
The scale of operations of the top 30 continued to expand with strong momentum,
though the mode of expansion became more rational.
The combined sales of the top 30 chain-store enterprises constituted 7.3% of
the total retails of consumer goods in China in 2005, 0.2 percentage point
higher than in the previous year. Of the 30, five enterprises each made sales
exceeding 20 billion yuan, one enterprise more than in the previous year, and
19 each made sales exceeding 10 billion yuan, four more that last year. Sales
of the lowest-ranking enterprise in 2004 were 4.58 billion yuan, while those in
2005 reached 5.43 billion yuan. The average per-shop sales increased by
different margins in 2005, with department stores ranking first with 332.072
million yuan, up 9.2%; those of specialized shops, 84.393 million yuan, up
60.7%; those of supermarkets, 31.186 million yuan, up 1.5%; and those of
convenience stores, 2.491 million yuan, up 35.6%.
The growth of sales and the number of outlets of the top 30 slowed by 2% and
3.1% in 2005, respectively, as compared with the previous year. The growth of
sales was 10.2 percentage points higher than that of the number of outlets,
which was 1 percentage point higher than in 2004. Among the top 30, 60% posed
higher growth in sales than in the growth of number of outlets.
Four types of retail outlets recorded strong differences in performance.
Specialized shops showed strong growth momentum, posing a growth of sales and
number of outlets of 60.7% and 50.8% over 2004, respectively, ranking first
among the retail type categories. Retailing enterprises for household electric
appliances expanded particularly strongly. Five big household electric
appliance retailers, namely Gome, Suning, Shanghai Yongle,
Jiangsu Five-Star and
Shandong Sanlian presented a growth of
66.8% in total sales and 61.0% growth in the number of shops. Of these, Beijing
Gome presented the fastest increases, recording 108.7% growth in sales and
87.7% in the number of outlets.
Department stores began a recovery in 2005, with sales increasing 25.7%
year-on-year, 11 percentage points higher than the growth in the previous year,
and accounting for 15.9% of the total sales of the top 30 as compared with
14.9% in the previous year, and the number of outlets increased 13.4%, down
8.4% year on year. Per shop sales of department stores ranked first in the
country to reach 332.072 million yuan, up 9.2%.
The growth of convenience stores slowed. Among the convenience stores in the
top 30 retail outlets, the sales and number of shops increased 35.6% and 11.3%
year-on-year in 2005, which was a slowdown in growth from 2004, dropping 14.1
percentage points and 8.9 percentage points.
Supermarkets remain the main player in the retail sector. Among supermarkets in
the top 30, including large supermarkets and warehouse member markets, sales
jumped 19.4% year-on-year, accounting for 45.2% of the total sales of the top
30; and the number of outlets went up 17.6%. But the growth slowed down by
13.4%, 7.7% and 4.1%, respectively.
Besides the four major types of retail enterprises, other types of retailers
presented an increase of 30.1% in sales, and 20.7% in number of outlets.
The competitive advantage of regular chain stores was remarkable, and the
development of franchise shops stepped up. Regular chain stores played an
increasingly important role in retail sales.
Of the top 30, sales of regular chain shops topped 409.96 billion yuan, up
35.2% year-on-year, and their proportion of total sales increased from 83.3% in
2004 to 86.9% in 2005. The number of outlets of regular chain shops reached
7,987, up 35.2%. About 50% of the top 30 enterprises have adopted a regular
chain store model.
At the same time, the franchise model, the introduction of which has been
welcomed by small and medium-sized enterprises, developed rapidly, with the
number of shops continuing to rise. Compared with 2004, the number of franchise
outlets increased 19.3%, and accounted for 47% of the total, up 4.7 percentage
points year-on-year.
The growth of foreign-funded chain-store enterprises slowed.
Among the top 30 retail outlets, seven were enterprises involving foreign
investment, including Suguo Supermarkets, Carrefour (China) Co, Shanghai Yongle
Household Electric Appliance Co Ltd, China Yum! Brands Inc (the parent company
of KFC and Pizza Hut), Trust Mart Commercial Development Group, China Resources
Vanguard Co Ltd and Jinjiang Metro Cash & Carry Co Ltd. [Note: Wal-Mart was
not included in the top 30 because the company, as a matter of policy, does not
release internal sales figures.]
Total sales of the seven foreign-funded chain store enterprises reached 96.79
billion yuan in 2005, rising 21.2% year on year, and accounting for 19.7% of
the total sales of the top 30, and their number of outlets was 4,182, up 19.7%,
and accounting for 25.1% of the total. Compared with 2004, total sales and
number of outlets of the seven foreign-funded China store enterprises slowed by
13.4% and 1.5%, respectively. Of these, the sales growth figures for China Yum!
Brands Inc, Suguo Supermarkets and Trust Mart were smaller than that of the
previous year.
