China'S Physical Retail Industry Faces Several Challenges In The Era Of Meager Profit

China Chain Store Association and PWC jointly issued "15" 2016

According to the Research Report on working capital management, Chinese retail entities are facing multiple pressures of slow income and rising costs, and are entering the era of meager profits.

Reporting in mainland China and Hongkong

Based on the open data of 86 retail enterprises, combined with the questionnaire of 21 top 100 retail chains in China, interviews with professors from Harvard Business School and top managers of China's top 100 retail enterprises were also conducted.

The report said that China's retail industry has experienced rapid growth in the past twenty years, but with slower growth, consumption upgrading and

The rise of the entity retailing industry is facing great challenges and challenges in all aspects of management.

The formats including department stores, supermarket stores, clothing stores and household appliance shops are obviously under the pressure of declining sales and rising cost costs, and profit margins are declining year by year.

In 2013, the net profit of China's retail industry was 3.6%, 3.7% in 2015, and only 3.2% in 2015. Some large scale department stores and general stores even suffered from negative revenue growth.

Chu Dong, Deputy Secretary General of China chain operation association, pointed out that retail industry as a link between production and final consumers, its development and pformation capabilities directly reflect the efficiency of the supply side.

The total retail sales of consumer goods in China increased by four times in the 11 years after joining the WTO, reaching 30 trillion yuan in 2015.

According to the report, although China is the second largest consumer market in the world in terms of total retail sales, China is still only a few years away from the developed countries.

For example, in inventory turnover rate, an important indicator of enterprise management capability, the days of inventory turnover in Chinese supermarkets are more than 50 days, higher than the average more than 30 days in American supermarkets.

According to the survey, 85% of Chinese retailers interviewed have realized that inventory management is the biggest challenge of working capital.

Wang Xiao, the managing partner of PWC's China retail and consumer goods industry, said that the increasing demand and the lack of prediction mechanism are considered as the important reasons for the difficult management of inventory in Chinese retail enterprises. The current Chinese retail enterprises need to take full account of the factors such as seasons and promotions, sales trends and other factors, and make use of the "demand information".

"To create digital operation and management capabilities.

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Experts said that in 2016, there were many new trends in the physical retail industry, such as the integration of online and offline businesses.

In addition, in the future, physical retailing can rely on big data to meet the personalized needs of customers and achieve precise push of advertising.

"First of all, we need to change the core of our business.

"Manage the community well, increase the content of services, strengthen customer maintenance, and manage good scenes and spaces.

Another important point is embracing new technologies. "

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