The latest statistics and analysis made by China General Chamber of Commerce show that China's top 100 retail enterprises continued their fast growing step in scale on the ground of years of sustained and rapid development. Their total retail sales volume achieved RMB 671.7 billion in 2005, up 26.4 percent year-on-year, representing 10 percent of the total retail sales of consumer goods in China. This reveals that large-scale retail enterprises have preliminarily seized the dominant position in China's retail industry, and the top 100 retail enterprises have also entered into the new platform of scale expansion.

The analysis indicates that the development environment of China's retail industry, especially large-scale retail enterprises, had experienced great changes in 2005. Firstly, the total retail sales of consumer goods actually increased by 12 percent in 2005, the highest both in terms of growth rate and growth range since 1997. Secondly, China's retail industry has opened up to the outside world in full directions since December 11th 2004, and foreign retail enterprises have also speeded up their entrance into Chinese market and accelerated their expansion step. Thirdly, China has begun to implement policies and measures aiming to foster and support the development of large-scale circulation enterprises. Fourthly, "Numerous Villages and Townships Project" has created new opportunities for some large-scale retail enterprises to march into or expand rural market. Fifthly, the work of launching or designing relevant laws and rules regulating and promoting the development of retail industry has entered into the "hottest" stage. All these new changes closely related to the development environment of China's retail industry have driven large-scale retail enterprises into a new development phase.

Insiders point out that among the 20 large-scale circulation enterprises fostered by the state, 17 are retail enterprises and have all entered into the first camp of the top 100 retail enterprises in 2005. Among the first ten enterprises on the list of the top 100 retail enterprises, 8 are fostered by the state (Suguo Supermarket and CR Vanguard have been combined into one) with their growth rate of total sales volume reaching as high as 37.3 percent. This shows that large-scale retail enterprises fostered by the state have become the critical force driving the top 100 retail enterprises to expand their scales rapidly.

The main retail formats of the development of large-scale retail enterprises had been basically determined in 2005. After the full market competition and the constant adjustment made by large-scale retail enterprises on their operation and development of the retail format structure, large-scale retail enterprises have basically determined their retail format structure, i.e., retail formats enjoying market advantages like department stores, hypermarkets, franchise stores and supermarkets, have become the mainstream formats for large-scale retail enterprises to operate and develop with a single or complex mode.

Statistics show that large-scale retail enterprises have speeded up their development toward the stage on which wholly state-funded or state-controlling enterprises, foreign-funded enterprises and non-governmental enterprises hold their respective powers. Among the top 100 retail enterprises in 2005, the sales volume of theses three kinds of enterprises represents respectively 56.2 percent, 30.2 percent and 13.7 percent of the gross sales of the top 100 retail enterprises; the growth rate of sales of non-governmental enterprises and foreign-funded enterprises were 48.3 percent and 30.2 percent respectively, far more rapid than that of large-scale wholly state-funded or state-controlling retail enterprises of 20.4 percent.

In 2005, large-scale retail enterprises also carried out the second round of expansion focused on merger. The expansion strategy of large-scale retail enterprises experienced obvious changes with common features in 2005, mainly giving expression in purchase, merger, assets reorganization, listing or frequent and active preparations for listing.

Experts point out that viewing from the current situation and the trend of the market development, large-scale departments will enter into a new development and transformation period, facing new and heavier competition pressure. As far as the development progress of international large-scale department stores is concerned, enhancing the brand grade of their operated goods is the necessary way for the existence and development of China's large-scale department stores.

Editor: Yan