New retail expected to create trillion-yuan market

New retail, a combination of traditional retail and manufacturing industries, is enjoying sound development in China and will embrace more opportunities going forward.

From self-service supermarkets to 30-minute deliveries, new retail has penetrated every corner of people’s lives over the past year.

2018 saw Chinese e-commerce giants gear up to expand their retail markets. Alibaba opened over 100 new offline retail stores, called Hema, in 16 Chinese cities. Its one-hour delivery service of fresh food and daily commodities also launched across 269 Chinese cities.

Alibaba’s rival Tencent is also making efforts to digitalize the retail industry, establishing in-depth cooperation with multiple retail giants including Carrefour and Walmart.

Liu Sijun, president of department store company Dashang Group, described 2018 as a year of reform of China’s new retail development, explaining that every mode of retail had been looking for opportunities over the last year.

As indicated by different organizations, new retail is expected to grow into a market with a value of up to 10 trillion yuan. Statistics by market research firm Mintel showed that the sector would account for 22.4 percent of China’s total retail sales of consumer goods in 2018, and 33 percent within five years.

During the first 11 months of 2018, China’s online retail volume exceeded 8 trillion yuan, growing 24.1 percent from the previous year, according to the National Bureau of Statistics.

Insiders pointed out that new retail enjoys vast development potential and will inject fresh impetus into consumption growth and economic development. On the one hand, it promotes consumption growth and upgrading, while on the other, it also benefits from the steady growth and upgrade of China’s consumption.

However, the industry needs to be thought about calmly, even though it is developing quickly, warned Wang Qiang, an associate professor from the School of Business, Renmin University of China.

“New retail is still in the retail industry, and to profit by offering products and services is a characteristic of the industry,” Wang noted, adding that the retail industry has an entirely different logic with the rapid realization of venture capitals.