By Dr. Shuguang Wang and Dr. Ken Jones

Given the large body of literature related to economic reform and regional development in China, surprisingly little attention has been paid to the retail sector.  This lack of attention reflects the traditional low status of the sector in the Chinese society.  In the 30 years before the economic reform began in 1978, retailing was limited to the distribution of basic necessities to consumers.  In a centrally planned economy, given the shortage of consumer goods, retailing was a passive activity, and any response by merchants to consumer preference was out of the question.  No competition existed.  Since 1978, however, the retail sector in China has experienced an enormous transformation.  Store ownership has diversified considerably; a limited number of foreign retailers have been allowed to enter the country; and almost all of the new retail formats that have been developed in Western economies have been introduced.  These new retail forms have included discount department stores, supermarkets, shopping centres, factory outlets, warehouse stores and retail chains.  

This monograph focuses on the three major trends that dominated the Chinese retail economy in the 1990s.  It begins with an overview of the size, structure and regional variations associated with the Chinese retail economy.  Given this context, the focus of the report shifts to a discussion of the three major changes, which are reflected in the declining sales performance of key retailers, the entry of foreign retailers and the development of indigenous retail chains.  In the final section, the dominant themes are summarized and future research directions are proposed.