The value of China’s food retail sector is to soar by almost 60% by 2012, according to research from industry analysts Datamonitor.
Go deeper with GlobalData
China, held up as one of the grocery sector’s key emerging markets, generated total revenues of US$434.5bn in 2007 and Datamonitor predicts that figure will rise by 59.7% to $694.1bn by 2012.
In its report, Datamonitor said that, on an annual basis, the growth in China’s food retail industry is expected to decelerate slightly. Between 2003 and 2007, the sector grew by 9.9% a year. According to Datamonitor’s forecast annual growth until 2012 will dip to 9.8%.
However, the analysts pointed out that India, another market touted as a critical emerging market for the retail sector’s multinationals, is forecast to grow by 5.4% a year until 2012 to $263.4bn.
Datamonitor said the “dynamic growth” seen in China continued to make the country an “attratcive prospect” for new entrants.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataHowever, any potential entrants into China’s food retail sector needed to be aware of competition from both ends of the spectrum, from hypermarkets to traditional wet markets.
“For foreign players, one barrier to entry is the need to ensure that scale economies are sufficient to allow competition on price with both existing wet markets and those hypermarkets that are competing on price,” the researchers said.
