Offline retailers explore new paths in China’s retail market

Years of rapid economic growth and the rise of internet-centric lifestyles have made Chinese consumers increasingly sophisticated. With a wide array of products, services, and channels available, consumers are constantly seeking the best solutions to meet their daily needs, and this provides growth opportunities across various channels. After years of rapid growth, e-commerce is entering a phase of moderated growth. Looking ahead, we expect a reshuffling of China’s retail landscape, led by offline retailers’ business model transition and omnichannel deployment.

In the food retail sector, e-commerce has also deepened its penetration and overshadowed offline retailers for the last few years, and offline retailers are evolving to adapt. Off-price retailers such as warehouse clubs, discounters, and bulk snack stores are gaining popularity amid the current economic downturn, as they meet consumers’ increasing preference for value-for-money products and services. Convenience stores, a format that focuses on providing convenience and efficiency to consumers through a curated selection of products, strategic locations, and instant retailing, remain robust. Additionally, some offline retailers secure their market position by providing an exceptional shopping experience and emotional value, for which consumers are willing to pay a premium. We believe these successful offline retail formats serve as a model for traditional retailers in their business model transition.