Research and Markets: China Retail Report Q1 2012: 68% growth by 2015 forecasted for OTC pharmaceuticals

DUBLIN--(BUSINESS WIRE)--Research and Markets (http://www.researchandmarkets.com/research/28703e/china_retail_repor) has announced the addition of the "China Retail Report Q1 2012" report to their offering.

Business Monitor International's China Retail Report provides industry professionals and strategists, corporate analysts, retail associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on China's retail industry.

The Q112 BMI China Retail Report forecasts that the country's total retail sales will increase by 67% in local currency terms by the end of the forecast period, growing from an expected CNY17.65trn (US$2.58trn) in 2011 to a projected CNY26.08trn (US$3.82trn) by 2016. Retail sales in China doubled between 2003 and 2008, when they broke through the CNY10trn (US$1.6trn) barrier for the first time. Strong underlying economic trends, population growth and the increasing wealth of individuals are key factors behind retail market expansion. Regulatory reform following China's accession to the WTO in December 2001 has allowed foreign retailers to make significant inroads into the market, contributing to forecast average annual retail sales growth of 13.1% in local currency terms.

The growth in the overall retail market will be driven in large part by a growing urban population with high disposable incomes and an interest in aspirational purchasing. According to socioeconomic forecaster Global Demographics, more than 30% of all urban households in China had an annual income above CNY40,000 (US$5,848) in 2007. The National Bureau of Statistics (NBS) estimates that urban retail sales accounted for nearly 68% of total retail sales in 2009, down slightly on 2008.

Retail sectors that are likely to achieve substantial growth over the forecast period include over-thecounter (OTC) pharmaceuticals, with BMI forecasting sales of US$16.38bn in 2011, predicted to rise by more than 68% by 2015 to US$27.57bn.

Automotive sales, worth a forecast US$329.21bn in 2011, are predicted to grow by more than 50% by 2015, reaching US$494.14bn. In 2006, China overtook Japan as the world's second-largest automotive market behind the US, following this up in 2007 with a record year in both sales and production terms. Sales of consumer electronic products are predicted to increase by 46%, from US$180.18bn in 2011 to US$262.95bn by 2015, with double-digit growth predicted for key products such as notebook computers, mobile handsets and video devices.

A sizeable multinational retail presence following the lifting of foreign direct investment (FDI) restrictions in 2001 has ensured the early adoption of modern retail best practices in China. Organised retail - Western-style chain outlets, department stores, supermarkets, etc - already accounts for an estimated 23% of the total retail market, far higher than the 5% in India.

Chinese retailers have been expanding into secondary and tertiary towns and cities. By June 2011, GOME Electrical Appliances Holding, China's leading retailer of household appliances and consumer electronic products, had 362 outlets in second-tier markets, up from 304 outlets in December 2010. In its 2010 annual report, the company said it believed that first-tier markets were its fundamental basis, but that second-tier markets will be the focus of future growth'.

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