The State Council released a guideline on driving innovation and transformation in physical stores today, in an effort to strengthen online and offline integration in the retail business.

The guideline proposed plenty of measures, ranging from environmental optimization to policy adjustments. Under the guideline, government branches will improve the layout of physical shops, reduce rent and loosen up restrictive terms about decoration, remodeling and outdoor marketing campaigns.

In addition, the government branches will provide incentives to create a system of supervision to ensure Chinese retailers, either online or offline, can compete fairly.

The guideline also urged local governments to set up more investment funds in supporting new technology and business models, expand consumer finance companies across the nation and take up measures to meet retailers' need for online payment.

"Online and offline integration is surely the future of retail business. Online shops have advantages in terms of business partners, information distribution channels and capital flow, while physical stores could offer instant delivery and better shopping experience," Vice-Minister of Commerce Fang Aiqing said at a news conference.

"We believe once online and offline channels further integrate, it will lead to a real circulation revolution in the retail industry," Fang added.