Chengdu is located in southwest China and is the capital of Sichuan province. It has a history of more than 2300 years and has been the political and trade center with convenient traffic and leisure culture. Chengdu has jurisdiction over 9 areas, 4 cities and 6 counties, covering an area of 12,400 square kilometers and possessing about 140.4 million residents. In 2010, Chengdu’ GDP was 555.13 billion yuan, increasing by 15% over the previous year. The annual fixed assets investments were 425.54 billion yuan, increasing by 5.7% over the previous year. The retail sales of consumer goods were 241.76 billion yuan, increasing by 18/8% over the previous year. The import and export volume was 24.66 billion dollars, increasing by 38.% over the previous year. The disposable income of urban and rural residents per capita was 20835 yuan, increasing by 11.7% over the previous year. By the end of 2010, 189 of the world’s top 500 enterprises have settled in Chengdu, promoting the diversity and high-end of consumption.
According to the outline of 12th five-year plan for economic and social development of Chengdu, Chengdu will establish an industrial system based on modern manufacturing and modern agriculture and centered on modern service industry and high-tech industry, achieving an optimization of three industrial structure for 3:45:52 by 2015.
Retail in Chengdu
On December 11th, 2004, Chinese government canceled equity and geographic restrictions on foreign investment in commercial fields and China’s retail industry became completely open to the foreign investors. The foreign retail giants, such as Wal-Mart, Carrefour and Metro, entered China and the domestic retailers, such as Parkson, Vanguard, New World Department Store, expanded fast. The competition in China’ s retail industry intensified. According to IDC, as income of urban and rural residents in second and third tier cities increases, the retail growth in Midwest China will be better than in first tier cities in a rather long time.
Take Chengdu as an example. Since 2011, both foreign and domestic retailers, such as Suning Plaza, Intime Group, GTC, Shin Kong Mitsukoshi, Shimao Group, have settled in Chengdu. The international brands entering Chengdu have reached 211, promoting the diversification and high-end consumption. All these result from the promising retial market and fast development of commercial real estate. In 2010, the retail sales of consumer goods in Chengdu totaled 241.76 billion yuan, an increase of 18.8% over the previous year, ranking 8th in business cities in China. In 2011, the retail sales of consumer goods Chengdu totaled 286.13 billion yuan, an increase of 18.4% over the previous year, ranking the 3rd among vice provincial cities in China (after Guangzhou and Shenzhen). The increase is most significant in daily necessities and food, office supplies and communication equipment, gold, silver and jewelry.
According to 2011 report of retail industry development in Chengdu, the retail industry in Chengdu is heading toward large scale and high-end. First, 6 major business circles are forming in Chengdu, namely, Chun-Yan business circle, Jinsha-Guanghua business circle, Hongpai Building business circle, Jianshe Road business circle, Tianfu New City business circle, Shawan business circle, among which, Chun-Yan business circle is the leading one with 22 large stores over 5000 square meters each and 4100 high-end fashion brands. The report shows that there was an obvious 23.3% increase in large retail stores over 10,000 square meter scale. Second, the e-commerce advanced the development in retail industry. The e-commerce transactions amounted 201.368 billion yuan in 2011, an increase of 145.81% over the previous year. The direct employees reached 46,200 and indirect employees reached 220,000. Third, the retail industry features chain management. The chain management of supermarket, convenience stores, appliance stores, restaurants and drug stores have great success and will continue to rise. This trend brings about a win-win situation that the retailers can reduce the operation and logistic cost while the consumers have more choices and convenience.
According to the development plan of service industry in Chengdu , Chengdu intends to become the business center serving Sichuan Province, affecting the western China and embracing the global business. Right now, the Tianfu New City business circle has gathered 13 large stores over 5000 square meters each and is constructing 33 key projects and 10 commercial complex projects, with an expectation to be a fashion city synchronous to Europe.
(Added Materials: Top 10 department stores and supermarkets in Chengdu in 2011 are Red Flag Chain stores, Ito-Yokado, Wangfujing Department Store, the Chengshang AG, Carrefour, Renhechuntian Department Sore, Renrenle, Huhui business, Meimeilicheng Department Store, Yanlordland Business)