Traditional retail business faces recession in China

11/04/16

Permalink 01:13:09 pm, by dacare, 360 words, 254 views   English (US)
Categories: News of China

Traditional retail business faces recession in China

Traditional retailing business is facing a severe recession in China as the Japanese department store Ito-Yokado closed another outlet in Beijing on Nov. 1.

On Oct. 31, only the first floor and the underground supermarket of the six-floor department store in the Shilipu neighborhood of Beijing were open for service. And the two floors closed early at 7:00 p.m.

The closing of the Shilipu outlet is of great significance to Ito-Yokado, as it was the group's first outlet in Beijing.

Cheng Ning, head of the publicity department of Ito-Yokado's Beijing branch, said that the outlet was closed mainly because its sales remained low even after business adjustments.

After the closure of the Shilipu outlet, Ito-Yokado only has two outlets and one food store in Beijing, and Cheng said Ito-Yokado will "try all means to ensure the smooth operation of the stores."

In the past three years, Ito-Yokado has closed seven outlets in Beijing without opening any new ones.

The situation is no better for other department stores nationwide.

So far, 29 listed department stores, supermarkets and chain stores have released their Q3 financial reports, and 16 of them registered decline in sales as compared to the same period of last year.

The Dalian-based Friendship Group and the Wuhan-based Zhongbai Holding Group reported bigger declines among the 16 companies.

The Friendship Group, mainly engaged in the retail, hotel operation and real estate development, reported quarterly revenue of 492 million yuan (U.S.$72.79 million), down by 23.67 percent yearly. In the first three quarters, its shareholders saw a total loss of 162 million yuan (U.S.$23.96) in net profits, down by 799.02 percent yearly.

The Zhongbai Holding Group, mainly engaged in retail and logistics businesses, registered a total revenue of 11.64 billion yuan (U.S.$1.72 billion) from January to September, down by 6.07 percent yearly. Its shareholders saw a loss of a loss of 174.82 million yuan (U.S.$ 25.86 million) in net profits, down by 201.39 percent year on year.

In contrast to the sluggish situation in traditional retail sector, China's e-commerce industry is booming.

China's e-commerce powerhouse Alibaba posted robust revenue growth for its second fiscal quarter ending Sept. 30. Its revenue growth rose 55 percent yearly to 34.3 billion yuan (U.S.$5.07 billion) for the quarter.

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