The Shipping Point: The Rise of China and the Future of Retail Supply Chain Management

CHAPTER FIVE

THE DEVELOPMENT OF CHINA'S RETAIL SECTOR AND BRANDS

PETER LEVESQUE

Shopping malls, once the symbol of abundance and leisure time in America, have gone global. In fact, in the list of the 10 top malls in the world today, only one is located in the United States. The world's largest mall is actually located in Beijing.¹ Walk down any busy city street in China today, and you will see hordes of shoppers bustling in and out of stores, malls and retail brand outlets. Victor and William Fung in their book Competing in a Flat World note that, “between 1979 and 2006 per capita retail sales in China increased 2,685 percent. Between 2005 and 2010 the Chinese middle class with incomes between US$7,239 and US$60,240 is expected to expand from 5 percent of households today, to 45 percent. In addition, retail sales in China are expected to hit 20 trillion yuan by 2020.”²

Shipping Point: “We used to build civilizations, now we build shopping malls.”

Bill Bryson

China has become both retail manufacturer and retail consumer, but there are still many issues to deal with as the country evolves. Up until the recent financial crisis, China focused on exports to fuel its economy, In fact China now exports more in a single day than it exported in all of 1978.³ With the onset of the global financial crisis Beijing began focusing on ways to decrease China's dependency on exports, by growing domestic consumption. The issue for China's retail sector is that most of what China produces for global ...