According to new research, China is set to become the largest retail market in the world by 2018, overtaking the United States.
A joint report from PwC and Economist Intelligence Unit forecasts that the sales volume growth in China will be at 7.9 per cent by 2018, whereas North America is expected to have lowest growth of 2.6 per cent compared to a global average of 3.4 per cent.
The report also states that, despite retail volume falling from 15.6 per cent back in 2009, “China is still expected to average growth of 8.7 per cent in the next two years”.
These results are not surprising, as in the last ten years China has improved in many areas, including; higher wages, standards of living and thriving urbanisation.
However despite the positive outlooks for China, International markets are less optimistic about the outlook, seeing a slowdown in the mainland as gross domestic product was 7.4 per cent in 2014, the slowest pace in over twenty years. Foreign direct investment in China last year hit $128 billion.
PwC and EIU on the other hand remain optimistic, with chief retail and consumer goods analyst at Economist Intelligence Unit, Jon Copestake, saying: “Yes, China is slowing down, but compared to the West, its GDP growth is enviable”.
He added that retailers need to get the basics right and ensure that “they are engaging with local partners and developing products to cater to local tastes”.
India is expected to have the second highest sales volumes of 6.6 per cent by the same year, twith the Philippines and Vietnam following behind.
Overall, Asian sales volumes are projected to hit $10.3 trillion by the year 2018, over twice the figure expected for North America.