Economic Slowdown Affects Chinese Retail in China

Published on Author rhynem14

sparadesintoChina_06.13.12Macy’s department store is the latest retail vendor to postpone or cancel online-expansion plans in China during to the country’s recent economic slowdown. However, the store claims the stall in the plans is due to needing to learn more about the Chinese market and shoppers. China’s e-commerce market has grow in competition; a Neiman Marcus warehouse previously used to fill Chinese orders from the retailer even shut down this year. The online shopping market in China has increased by about 70% in the last 4 years. Despite the cancellation of the plans to expand the store in China at the current time, Macy’s CFO says the company continues to look at China as a place with great potential for future expansion. 

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2 Responses to Economic Slowdown Affects Chinese Retail in China

  1. I think that decisions like this show that the Chinese economy is more tepid right now than it might seem. However, the difficulty of foreign players to compete for Chinese consumers could have to do with more domestic competition that better implements rollouts of new products and retail networks. I think it is interesting that Neiman Marcus was having trouble growing too. Both companies would target higher income individuals but the combined problems of both companies show that Chinese consumers on the highest and high ends of the spectrum may be struggling a little bit, or at least not growing economically as fast as expected.

  2. Yes indeed, existing competition is strong – if an international company is only now entering the market, they may be too late. [I don’t know what the mix is between purely domestic and foreign-affiliated department stores – in my limited time shopping in China, I didn’t see a lot of department stores of any type.]

    And what department stores successfully sell varies from country to country, in store format and in brands & styles, so there may be an element of truth in “taking time to study” but that means even greater delay in entering, during which incumbents won’t be sitting still.