Thanks to the economic boom and higher disposable incomes, standards of living in China are improving and the demand for consumer goods is on the rise. Expenditure on private consumption has risen continuously over recent years.  This is mainly down to the growing middle class in the cities. According to a study by Deloitte (www.deloitte.com), the number of well-to-do private households is set to rise to almost 40 million over the next ten years – despite today’s difficult global economic conditions. In particular, young, well-educated Chinese in the service sector, the so-called white-collar workers, have a high purchasing power. A large proportion of white-collar workers is brand-conscious and goes shopping at least once a quarter.

With the growing prosperity of many Chinese and the country’s increasing openness to foreign companies, the image of retail is also changing. The country is witnessing a decline in the number of small shops and street merchants, while the share being served by modern sales channels is on the rise – especially in the cities. The growing middle class is placing ever more emphasis on quality and hygiene, as well as the aspect of shopping for pleasure. Increasing numbers of supermarkets, hypermarkets, convenience stores and mini-markets are being opened and are altering the traditional retailing landscape. Nevertheless, the country’s five biggest food retailers account for less than 5 percent of total sales.