China is quickly finding itself in uncharted retail territory, with a large availability of new shopping malls coinciding with the fast adoption of e-commerce by its rapidly-expanding consumer class. Despite the projection of 70 per cent growth in consumer class, several factors are contributing to the more cautious sentiment among the top luxury houses in China.
Furthermore, slower growth in the private sector and in the number of newly affluent households has arguably reduced the growth of funds available for high-priced goods.
China is expected to overtake the USA as the world’s largest overall retail market within five years and Chinese spending could account for one-quarter of the global retail market within a decade. But China’s long-term outlook will be of moderating growth, as wage rises taper off and the retail market reaches saturation creating challenges for retailers. Opening more stores alone is no longer a guarantee of success.
