China Retail Industry Report 2014-Preview

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2 - CHINABRIEFING | Special Edition, April 2014
Introduction
Lotus Dream (荷梦)
Hu Yongkai (胡永凯)
Chinese Painting, 102 x 50 cm
Wan Fung Art Gallery (云峰画苑 )
| | +86 21 6487 4072 * 107
China is undergoing amajor overhaul, transitioning froma global manufacturer
to a service and consumption driven economy. While rising wages have driven
up disposable income, urbanization and the growth and expansion of the
middle class in third and fourth tier cities means more and more consumers
are demanding a variety of quality products, translating into opportunities for
foreign retailers. According to the Economic Intelligence Unit, China is expected
to overtake the U.S. as the world’s largest retail market by 2016.
To succeed in the Chinese market, it is important for foreign retailers to fully
understand China’s legal system, business environment, and culture. For
example, there are certain limitations and restrictions in the Chinese legal and
business environment that companies in theWest do not commonly encounter and thus may be unable
to anticipate. In this regard, it is important to work closely and consult with local professionals to ensure
compliance.
Chinese culture encompasses tremendous variety, as reflected by its many dialects and regional cuisines.
There is also a widening income gap in the country, meaning that different income groups are looking
for vastly different products. Conducting thorough market research to understand one’s consumers and
their demands is key, along with tailoring products to meet the needs of different audiences.
In this special edition of China Briefing, we provide an overview of the retail industry in China and the
procedures for setting up a retail shop, focusing specifically on brick-and-mortar physical retail stores.
Further, we have invited our partner Direct HR to offer some insights on the talent landscape in the retail
industry, as well as tips for recruiting retail personnel in China.
We hope you will find this issue informative and helpful as you explore themany opportunities for setting
up a retail business in China.
Kind regards,
For Reference
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Special Edition, April 2014
This Month’s Cover Art
Alberto Vettoretti
Managing Partner, China
Dezan Shira & Associates