Source: http://www.CRNTT.com 2015-02-14 21:41:40

The latest prediction by PricewaterhouseCoopers (PwC), one of the world’s four largest accounting firms, said that by 2018 China will become the world's largest retail market, but that Hong Kong’s retail sales next year may record a negative growth.

According to Hong Kong’s South China Morning Post on February 13, this "2015-16 Outlook for the Retail and Consumer Products Sector in Asia” was compiled and published by PricewaterhouseCoopers in collaboration with the Economist Intelligence Unit.

The report said that, overall, the Asia-Pacific region continues to be the destination for the vast majority of international retail chains. The retail sales in the region this year will be up 4.6 percent. The growth impetus will still mainly derive from China and India, although the two countries are facing issues of slower economic growth and inadequate market reforms.

The report said that the retail sales growth trend in the Asia Pacific region is expected to continue and by 2018 to reach as high as 10.3 trillion US dollars, double the expected value of 5 trillion over the same period in North America.

The Reference News (www.Cankaoxiaoxi.com) newspaper reported that Michael Cheng, Retail and Consumer Leader and partner of PwC Asia Pacific and Hong Kong/China, said that the Asia-Pacific region has the potential to drive innovation in areas of e-commerce and new product development.; Japan, Korea and Taiwan all have world-leading electronics companies, and consumers in China and India are among the world's most active users of mobile communication technologies and social media.

The report pointed out that although China's economic growth has slowed, as far as the international chain of retail businesses concerns, it is still an irresistible market. China’s retail sales growth of 15.6 percent in 2009 gradually slowed since then, but the expected average annual growth rate in the next two years is still 8.7 percent and in 2018 it should become the world's largest retail market.

The report recommended that in facing the slowdown of the Chinese market, the retailers should adjust their business strategies by expanding the retail channels of consumer electronics, especially mobile electronics.

In 2013, China surpassed the US to become the world's largest e-commerce market including mobile payment transactions which surged from the total proportion of 1.5 percent in 2011 to 8 percent in 2013. It is expected that the proportion in China will rise to 20 to 30 percent in 2015.

As for the high-end consumer goods market in Asia, after experiencing the Chinese high consumer-led growth, it also shows signs of slowing down.

China's economic slowdown and its Central Government’s continued anti-corruption effort have made companies of high-end consumer goods examine their expansion strategies abroad. The Japanese yen depreciation and the local sales tax increase are further blows to the sales of high-end consumer goods within the region.

But the report said that China's demand for high-end consumer goods remains strong, and the Chinese people continue to buy such products overseas.

In 2012, the Chinese consumers’ overseas consumption amounted to as much as $100 billion, of which 65 percent was spent on shopping.

The report said that the volume of retail sales in Hong Kong next year may show negative growth.

The market is expected to raise interest rates at the end of this year, which will reduce consumer spending, while the Hong Kong dollar’s peg to the US dollar weakens the Hong Kong tourism attractiveness in comparison with other countries in the region. But an interest hike can dampen expectations of real estate price rises and ease the housing burden of the consumers, including reducing rental costs. There will be a slight enhancement of the retailers’ profits.