Retail Sales Slowed In Beijing In The First Half Of The Year

Beijing city commerce and Industry Bureau recently released "first half of Beijing" foreign capital In the first half of this year, the number and number of new businesses in wholesale and retail enterprises were reduced, but the original enterprises increased substantially. This is probably due to the sharp rise in house prices.

According to the industry and Commerce Department of the city, in 2009, foreign investment in wholesale and retail industry had fallen into a recession, but in 2010 it returned to an upward trend. However, the number and size of new retail and wholesale enterprises have dropped again this year. Data show that in the first half of this year, 133 foreign-funded enterprises registered a decrease of 10.13% compared with the same period last year, with a total investment of 134 million 190 thousand US dollars, a registered capital of 89 million 980 thousand USD and a foreign party's authorized contribution of US $75 million 490 thousand, representing a decrease of 53.08%, 44.8% and 52.35% respectively.

There are many retail outlets for the slow down of new stores. enterprise All have said that China has increased the entry threshold of retail industry due to the rising land price. The hypermarket is usually located in the urban area with high volume of traffic, so establishing a hypermarket in China requires a lot of capital to invest in real estate and infrastructure construction.

It has been reported that many retail enterprises have changed their development strategies due to the rising land prices and other factors. Gao Xin retail, which owns the two well-known retail brands of big Rand and Auchan, has said in its prospectus that its expansion plan has shifted from focusing on the development of the first tier cities to changing to the suburbs of the second tier and Nanjing, Suzhou, Lanzhou and other tier cities. It has also been reported recently that foreign retailers, represented by WAL-MART and IKEA, have abandoned their ten year rental store strategy because of the rapid rise in rents, instead of buying land in China to expand the storefront.

In addition, the data show that the current foreign capital enterprise The activity of mergers and acquisitions in Beijing has improved. It is understood that in the first half of this year, Beijing's domestic capital transferred to 43 foreign-funded enterprises, an increase of 7.5% over the same period last year. The industry is concentrated in scientific research, wholesale and retail, leasing and business services. The expansion of M & A of foreign capital is becoming more and more active, which may be related to the change of development strategy after the increase of shop cost.