This report covers supermarket and hypermarket retailing in China from every angle, including the structure of the industry, its size, growth and future potential.

The report also provides analysis of how the leading competitors in the market are fairing, and looks at how strong competition (particularly in the main urban centres) is leading to shrinking profits. There is also analysis of potential growth in the main regions and cities, and whether there is any real potential for new market expansion into rural areas.

As well as reporting the data on the market, the report analyses the problems with definitions and statistical data on the market, and how this affects reporting of the real situation. Likewise, the report looks at the problems of rising costs, declining margins and how the market is being restricted by the slow growth in the distribution infrasructure.

KEY REPORT FEATURES
This new Access Asia report covers:
• A critical analysis of the retail and consumer statistics from China, with a realistic valuation based on fully explained methodology;
• The total, regional and sector value for supermarket and hypermarket retail sales, up to the end of 2006;
• Statistical data on market shares by sales in China up to 2006;
• Market data for each key provincial and urban region, with a summary of retail prospects in each, up to 2006;
• Value forecast retail market, up to 2011;
• Key current issues;
• Analysis of statistics covering the supermarket and hypermarket retail industry;
• Overview of China’s demographics and macroeconomics.

EXECUTIVE SUMMARY
Access Asia’s retail sales statistics are calculated as sum of individual markets within the retail sector, with reference to estimates of the total retail market, based on analysis of Chinese government data, and comparisons with other data sources. We research each of the sectors of the market individually, using industry and company sources, as well as national statistics.

Our figures do not match oft-quoted government retail statistics, which, as well as being worked out in a totally different way, include such non-retail commercial activity as wholesaling, catering and other services.

In 2005, following a survey of the growth in private enterprise in the services sector, the Chinese government revised the value of the nation’s Gross Domestic Product (GDP) by nearly 17%. This move precipitated a complete re-evaluation of China’s total retail market value, based on comparisons made with other countries in the Asian region, and a re-evaluation of each of the individual sectors within.

Based upon these recalculations of retail sales, and based upon the growth in individual retail sectors, Access Asia estimates that between 1999 and 2006, China’s total retail market grew 157.41% in current terms to RMB4.16trn – representing an annual average growth rate of 19.68% over that period.

China’s supermarket industry continues to develop rapidly. New chain store networks are emerging outside the top three cities of Beijing, Guangzhou and Shanghai as retailers extend their reach into many second- and third-tier cities. There is beginning to be aggressive consolidation in the market, as larger operators swallow up smaller players.

Foreign supermarket and hypermarket chains, such as Carrefour, have already entered the market, but room for expansion in the tier-one cities is now limited. Much more attention is now being focused, by both foreign and domestic chains, on outlying suburbs, as well as provincial new towns and cities. However, growth is hampered by the lack of distribution infrastructure. Also, although consumer incomes and spending have grown significantly, average purchases are still very small, and margins are tight.

According to government data, which only covers supermarket chains over a certain size, China’s supermarket retail market comprised about 26,429 stores, and is valued at RMB647bn, but the estimated total size, including all supermarkets, based on our own findings, is significantly more.

INTRODUCTION

1 NATIONAL SUPERMARKET RETAIL MARKET
1.1 Overview
1.2 Supermarkets: Defining The Potential Market
1.2.1 Defining The Potential Market: So, How Big is the Consumer Market?
1.2.2 Defining The Potential Market: The Mythical Chinese Middle Class
1.3 The Supermarket Industry Structure
1.3.1 The Supermarket Industry Structure: The Total Value of the Retail Market in China
1.3.2 The Supermarket Industry Structure: What Is The Definition of a C-store in China?
1.3.3 The Supermarket Industry Structure: Provincial Number of Outlets
1.3.4 The Supermarket Industry Structure: Provincial Outlet Floorspace
1.3.5 The Supermarket Industry Structure: Provincial Outlet Staff
1.3.6 The Supermarket Industry Structure: Provincial Outlet Sales
1.3.7 The Supermarket Industry Structure: Major City Number of Outlets
1.3.8 The Supermarket Industry Structure: Major City Outlet Floorspace
1.3.9 The Supermarket Industry Structure: Major City Outlet Staff
1.3.10 The Supermarket Industry Structure: Major City Outlet Sales
1.4 The Supermarket Industry Value
1.4.1 The Supermarket Industry Value: Macroeconomic Context
1.4.2 The Supermarket Industry Value: The Government Estimate
1.4.3 The Supermarket Industry Value: The Alternative Estimate
1.4.4 The Supermarket Industry Value: Differences by Size of Outlet
1.4.5 The Supermarket Industry Value: Differences by City Tier
1.4.6 The Supermarket Industry Value: The Urban Context
1.5 The Relative Potential Markets in Urban Areas
1.5.1 The Relative Potential Markets in Urban Areas: The Retail Market Split
1.5.2 The Relative Potential Markets in Urban Areas: The Leading Commercial Cities
1.5.3 The Relative Potential Markets in Urban Areas: High Levels of Savings – Self-taxation?
1.5.4 The Relative Potential Markets in Urban Areas: Urban Consumer Spending Power
1.5.5 The Relative Potential Markets in Urban Areas: China’s Leading Shoppers Only Spend US$5 A Day!
1.5.6 The Relative Potential Markets in Urban Areas: Defining “Consuming China”
1.5.7 The Relative Potential Markets in Urban Areas: Quantifying “Consuming China”
1.5.8 The Relative Potential Markets in Urban Areas: The Yangzi River Delta (YRD)
1.5.9 The Relative Potential Markets in Urban Areas: The Pearl River Delta (PRD)
1.5.10 The Relative Potential Markets in Urban Areas: The Beijing-Tianjin Corridor (BTC)
1.5.11 The Relative Potential Markets in Urban Areas: Shanghai
1.5.12 The Relative Potential Markets in Urban Areas: Beijing
1.5.13 The Relative Potential Markets in Urban Areas: Guangzhou
1.5.14 The Relative Potential Markets in Urban Areas: Chengdu
1.5.15 The Relative Potential Markets in Urban Areas: Wuhan
1.5.16 The Relative Potential Markets in Urban Areas: Tianjin
1.5.17 The Relative Potential Markets in Urban Areas: Shenzhen
1.6 Does Rural China Have a Potential?
1.6.1 Does Rural China Have a Potential?: The Great Push Into The Countryside
1.6.2 Does Rural China Have a Potential?: Per-capita Sales by Province
1.7 Leading Retailers
1.7.1 Leading Retailers: Top 25 Chainstore Retailers’ Turnover & Stores
1.7.2 Leading Retailers: Top 25 Chainstore Retailers’ Retail Market Shares
1.7.3 Leading Retailers: Top-3 Foreign-invested Supermarket Retailers
1.7.4 Leading Retailers: 25 Leading Supermarket Chains Sales & Outlets
1.7.5 Leading Retailers: 25 Leading Supermarket Chains’ Average Sales Per Outlet
1.8 Retail Prices & Operational Costs
1.8.1 Retail Prices & Operational Costs: Retail Price Indices
1.8.2 Retail Prices & Operational Costs: Outlet Rent
1.8.3 Retail Prices & Operational Costs: Salaries
1.8.4 Retail Prices & Operational Costs: Business Taxes
1.9 Outlook
1.9.1 Outlook: Forecast Trends
1.9.2 Outlook: Total Market Size
1.9.3 Outlook: Food/Non-food & Urban/Rural Values
1.9.4 Outlook: Food/Non-food & Urban/Rural Shares
1.9.5 Outlook: Food/Non-food & Urban/Rural Growth Rates
1.9.6 Outlook: Supermarket Sector Measures
1.9.7 Outlook: Supermarket Sector Measure Growth
1.10 Current Issues
1.10.1 Current Issues: Background to WTO and China
1.10.2 Current Issues: Current WTO Restrictions
1.10.3 Current Issues: WTO Timetables for Retailing and Distribution
1.10.4 Current Issues: Foreign Wholesale Involvement
1.11 Seasonal Retail Trends
1.11.1 Seasonal Retail Trends: National Day
1.11.2 Seasonal Retail Trends: Chinese New Year
1.11.3 Seasonal Retail Trends: Christmas
1.11.4 Seasonal Retail Trends: May Holiday
1.11.5 Seasonal Retail Trends: Children’s Day
1.11.6 Seasonal Retail Trends: Other National Holidays and Festivals
1.11.7 Seasonal Retail Trends: Seasonality & Climate

2 SWOT ANALYSIS
2.1 Strengths
2.2 Weaknesses
2.3 Opportunities
2.4 Threats

3 LEADING SUPERMARKET RETAILER PROFILES
3.1 Auchan
3.1.1 Auchan: Contact Details
3.1.2 Auchan: Background
3.1.3 Auchan: In China
3.1.4 Auchan: Financial Results
3.2 Bailian (Brilliance) Group
3.2.1 Bailian (Brilliance) Group: Contact Details
3.2.2 Bailian (Brilliance) Group: Background
3.2.3 Bailian (Brilliance) Group: Financial Results
3.3 Beijing Hualian Group Co., Ltd.
3.3.1 Beijing Hualian Group: Contact Details
3.3.2 Beijing Hualian Group: Background
3.3.3 Beijing Hualian Group: Financial Results
3.4 Beijing Jingkelong Commercial Group
3.4.1 Beijing Jingkelong: Contact Details
3.4.2 Beijing Jingkelong: Background
3.4.3 Beijing Jingkelong: Financial Results
3.5 Bubugao (Betterlife) Supermarket Chain
3.5.1 Bubugao: Contact Details
3.5.2 Bubugao: Background
3.5.3 Bubugao: Financial Results
3.6 Carrefour (China) Management Consulting Services Co., Ltd.
3.6.1 Carrefour China: Contact Details
3.6.2 Carrefour China: Background
3.6.3 Carrefour China: Financial Results
3.7 Home World Chainstore Commercial Group
3.7.1 Home World: Contact Details
3.7.2 Home World: Background
3.7.3 Home World: Financial Results
3.8 Jiangsu Times Supermarket Co., Ltd.
3.8.1 Jiangsu Times Supermarket: Background
3.8.2 Jiangsu Times Supermarket: Financial Results
3.9 Jiangsu Wenfeng Great World Chainstore Development Co., Ltd.
3.9.1 Jiangsu Wenfeng Great World Chainstore Development: Contact Details
3.9.2 Jiangsu Wenfeng Great World Chainstore Development: Background
3.9.3 Jiangsu Wenfeng Great World Chainstore Development: Financial Results
3.10 Lotus Supermarket China Co., Ltd.
3.10.1 Lotus Supermarket China: Contact Details
3.10.2 Lotus Supermarket China: Background
3.10.3 Lotus Supermarket China: Financial Results
3.11 Metro AG
3.11.1 Metro: Contact Details
3.11.2 Metro: Background
3.11.3 Metro: Financial Results
3.12 NongGongShang (NGS) Supermarket Group Co., Ltd.
3.12.1 NongGongShang (NGS) Supermarket Group: Contact Details
3.12.2 NongGongShang (NGS) Supermarket Group: Background
3.12.3 NongGongShang (NGS) Supermarket Group: Financial Results
3.13 Park’N’Shop
3.13.1 Park’N’Shop: Contact Details
3.13.2 Park’N’Shop: Background
3.13.3 Park’N’Shop: Financial Results
3.14 Renrenle Commercial Group
3.14.1 Renrenle Commercial Group: Contact Details
3.14.2 Renrenle Commercial Group: Background
3.14.3 Renrenle Commercial Group: Financial Results
3.15 RT Mart
3.15.1 RT Mart: Contact Details
3.15.2 RT Mart: Background
3.15.3 RT Mart: Financial Results
3.16 Shenzhen A-Best Supermarket Co., Ltd.
3.16.1 Shenzhen A-Best Supermarket: Contact Details
3.16.2 Shenzhen A-Best Supermarket: Background
3.16.3 Shenzhen A-Best Supermarket: Financial Results
3.17 Tesco (Hymall)
3.17.1 Tesco (Hymall): Contact Details
3.17.2 Tesco (Hymall): Background
3.17.3 Tesco (Hymall): Financial Results
3.18 Vanguard (China Resources)
3.18.1 Vanguard (China Resources): Contact Details
3.18.2 Vanguard (China Resources): Background
3.18.3 Vanguard (China Resources): Financial Results
3.18.4 Vanguard (China Resources): Suguo Supermarket
3.19 Wal-Mart (China) Investment Co., Ltd.
3.19.1 Wal-Mart (China): Contact Details
3.19.2 Wal-Mart (China): Background
3.19.3 Wal-Mart (China): Financial Results
3.19.4 Wal-Mart (China): Trust Mart: Contact Details
3.20 Wuhan Zhongbai Warehouse Supermarket
3.20.1 Wuhan Zhongbai Warehouse Supermarket: Contact Details
3.20.2 Wuhan Zhongbai Warehouse Supermarket: Background
3.20.3 Wuhan Zhongbai Warehouse Supermarket: Financial Results
3.21 Wumart Group
3.21.1 Wumart Group: Contact Details
3.21.2 Wumart Group: Background
3.21.3 Wumart Group: Financial Results
Table 3.24 WUMART GROUP CO., LTD.: FINANCIAL RESULTS, 2004-2006*

APPENDIX: MARKET BACKGROUND
A.1 Fast Facts
A.2 Regions of China
A.3 Demographics
A.3.1 Demographics: Total Population
A.3.2 Demographics: Population by Location
A.3.3 Demographics: Population Breakdown by Location
A.3.4 Demographics: Population by Province
A.3.5 Demographics: Population Density by Province
A.3.6 Demographics: Population Concentration
A.3.7 Demographics: Population by Gender
A.3.8 Demographics: Population by Age Group
A.4 Consumer Attitudes
A.4.1 Consumer Attitudes: Overview
A.4.2 Consumer Attitudes: Response to Political Change
A.4.2 Consumer Attitudes: Response to Economic Change
A.4.3 Consumer Attitudes: Changes in Lifestyle
A.5 Consumer Wealth
A.5.1 Consumer Wealth: GDP and Cost of Living
A.5.2 Consumer Wealth: Provincial Differences in GDP
A.5.3 Consumer Wealth: GDP Growth by Province
A.5.4 Consumer Wealth: GDP Per Capita by Province
A.5.5 Consumer Wealth: Concentration of Wealth by Province
A.5.6 Consumer Wealth: The Major Cities
A.6 Households
A.6.1 Households: Overview of Household Conditions
A.6.2 Households: Total Households by Size
A.6.3 Households: Total households by Urban/Rural Split
A.6.4 Households: Income Earners Per Household
A.7 Employment
A.7.1 Employment: Number of Workers by Sector
A.7.2 Employment: Growth by Sector
A.7.3 Employment: Number of Workers by Gender
A.7.3 Employment: Number of Workers by Habitation
A.7.4 Employment: Urban Unemployment
A.8 Consumer Income
A.8.1 Consumer Income: Average Incomes by Sector
A.8.2 Consumer Income: Growth by Sector
A.8.3 Consumer Income: Average Incomes by Region
A.8.4 Consumer Income: Growth by Region
A.9 Consumer Market
A.9.1 Consumer Market: Spending Trends
A.9.2 Consumer Market: Per Capita Consumer Expenditure
A.9.3 Consumer Market: Retail Sales and Consumer Spending
A.9.4 Consumer Market: Urban Income and Spending Compared
A.10 Exchange Rates
A.10.1 Exchange Rates: China
A.10.2 Exchange Rates: Hong Kong