Digitalization Efforts of Chinese and Indian Retailers Held Back by External Pressures

Chinese and Indian retailers are keenly aware of digitalization benefits but market barriers to entry are high and well-guarded by major retailers, according to a report by Euler Hermes.

The trade credit insurer’s Digital Retail Survey says that astute market players with a heightened awareness of digitalization have the potential to gain significant market shares.

In 2017 and beyond, Chinese real retail sales should stabilize at around +9% growth, slightly below the double-digit long-term average.

Retailers are betting on an online-to-offline (O2O) strategy to leverage opportunities offered by the rise of a new middle class. Electronics and online retailers should sustain the momentum, while the luxury segment is set to restructure – impacted by the anti-ostentatious policy.

India: All bets are off

Indian retail sales will stabilize at a +3/+4% growth in 2016 and beyond, supported by strong demand and accommodating government policies.

The food segment will benefit from a volume effect as consumer spending rises. Fashion profits reached 7.9% in 2016, while general retail enjoyed a more modest 2%.

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