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Domestic retailers suffer low revenue growth

By Cai Xiao (chinadaily.com.cn) Updated: 2014-12-19 16:34

The revenue growth of Chinese domestically-listed retailers will continue to be low this year and in 2015, after dropping to 2.4 percent year on year in the first half of 2013, according to experts at PwC.

"The lower growth rate may be largely influenced by a lack of consumer incentives, a slower economic recovery and government policies to promote urbanization that were less effective than anticipated, " said Kevin Wang, PwC China Retail & Consumer Leader,on Thursday. "Although the Chinese retail sector looks good, the low growth rate of domestically-listed retailers will continue to be low in 2014 and 2015."

As for Chinese domestically-listed retailers, Hong Kong-listed retailers and Fortune 500 retailers, revenue growth had a similar trends between 2008 and 2013.

The Chinese retail industry's operating profit margin dropped from 5.3 percent in 2008 to 3.9 percent in 2013 because of higher fixed costs and the rise of Internet retailing.

"Traditional retailers should boost integrated technology support to the overall information, logistics and customer relationship systems as well as build a professional online retail team," said Jean Sun, PwC North China Retail and Consumer Assurance Leader. "Using big data marketing, they should get a deep understanding of their customers and develop more tailor-made marketing strategies."

"The consumer market is very large in China and Chinese traditional retailers have their own advantages, and they should consider better use of their stores, and decrease costs of labor and water and electricity," said Wang.

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