Australia vs. China Retail Industry

Retail Management 1
AUSTRALIA VS. CHINA RETAIL INDUSTRY
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Retail Management 2
China, Australia Retail Industry
There are several characteristics that help to point out differences in both
Australian and China’s retail sector. For instance, China’s retail sector continues to
experience significant growth as a result of growing middle-class. China on the other
hand is considered as the second largest retail market in the world based in the total
retail sales. The retail sales of consumers grew by a significant margin implying that the
consumption environment remained relatively stable. The driving force in China’s retail
industry is pegged on the influential abilities of the millennial in the retail sector.
Diversely, Australian retail Industry is experiencing dramatic changes that are attributed
to the influx of global retailers as well as increase in technological capabilities. The
steady growth in the retail sector in Australia is said to have been caused by high
unemployment rate.
Departmental stores
Based on the statistics from departmental stores in both countries, Australia’s
departmental stores have witnessed huge losses and shrinking revenue which is
attributed to competition that is brought about by online and offshore retail sector. More
so, consumers’ sentiments with regards to departmental store has been dwindling. This
market scenario is attested by the examples of major departmental stores in Australia
that are characterized by poor profits and losses. While departmental stores in Australia
continue to shrink, their counterparts in China are busy integrating online-to-offline
strategies aimed at maximizing all channels to increase competitive advantage (Balaji
and Roy 2017).
Examples of these strategies include digitization of retail outlets and enabling
easy access of entertainment gadgets. China’s departmental stores are also partnering
with internet players to carry out various O2O programs. China’s solution to dwindling
revenues in the departmental stores also factors differentiation strategy whose strategy
is to focus on product quality and service offering. More so, china is involved with
various initiatives that aim at transforming the business model. The solutions Australia
departmental stores have put in place to address the shortfalls include price battles with
the aim of trying to accommodate the consumers to the pay less (Ahsan and Rahman
2016). Companies such as Myer and David Jones are known to increase the ratio of

Retail Management 3
house label and exclusive brands to decrease competition. The Australian departmental
stores are also involved in streamlining the supply chain by preferring direct sourcing.
Some of the existing players in the industry put their focus on expanding stores to
increase market share and influence brand perception among consumers (Bailey et al
2015).
Hypermarkets and supermarkets
The hypermarket and supermarket in China retail industry are experiencing slow
growth. The reasons attributed to the slow growth in hypermarkets and supermarkets is
poor economic growth, weak consumer reviews and high operating costs. Majority of
the main players in China’s supermarkets and hypermarkets are centered to local
operations while the mid-sized players tend to look for other markets regionally.
Besides, both supermarkets and hypermarkets stores opening have reduced in the
recent years. Most hypermarkets and supermarkets in China are downsizing to match
the trending needs of consumers seeking convenient stores, personalization and fast
delivery services (Bayly, Scollo and Wakefield 2014).
Online-to offline strategies are also encouraged among hypermarkets and
supermarkets. However, the online grocery and fresh produce business is gaining
traction while players seek private label development among other retail technologies
aimed at enhancing efficiency. When it comes to Australia, the supermarkets and
hypermarkets are becoming increasingly competitive. This has since led to private label
becoming popular. While China’s supermarkets and hypermarkets are influenced by
online-to-offline strategies, those in Australia are influenced by aggressive price
minimization strategies. Another crucial factor that differentiates Australian
supermarkets from those in China is that they are highly concentrated. The high
concentration is attributed to strong growth in the industry. Increase in competition in the
Australian supermarkets and hypermarkets leads to price cuts.
Convenience stores
When it comes to convenience stores, Australia’s convenience stores are
considered strongest in the world (Hajkowicz, Cook and Littleboy 2012). The
convenience industry in Australia has outperformed the grocery stores and as at 2016,
the value of convenience stores in Australia was valued at 8.3 billion. The value of

Retail Management 4
convenience stores rose by a 4.5 percent outperforming pharmacy, liquor and grocery.
The primary driver of convenience stores is food which accounts for the highest
proportion of the sales. Another contributor to convenience sector is the sales of
tobacco. However, it is illegal to sell packaged alcohol in a convenience store in
Australia. Convenience stores in China are not as strong as in Australia although the
convenience stores in China are experiencing moderate growth.
The development of convenience stores in China remains unbalanced with
specific places such as Guandong and Shanghai having the highest concentration. In
essence, convenience stores are more developed in the coastal region than in the
inland areas. There are no leading players in the convenience stores in China like it is in
Australia. In China, Most convenience stores operate regionally (Chen et al 2015).
China’s convenience stores players constantly transform and re-invent to keep up with
increased competition. Besides, most convenience stores focus on fresh produce and
private label as their differentiating factor.
Luxury products retail sector
The Australian luxury retail industry has been growing gradually over the past
five years. The luxury retail sector in Australia is protected from financial instability that
has crippled the global retail sector. The primary drive that encourages growth in the
Australian luxury retail sector is demand increase attributed to tourism (Mao and Huang
2016). Another factor that encourages growth in this sector is market polarization.
Competition is likely to increase as new businesses set up boutique stores. The
Australian Luxury retailing industry success factors include proximity to key markets,
attractive products display and clear market position. On the other hand, the sales of
luxury products in the retail market in China fell in 2016 although it continues to be a
major player in the Global luxury market accounting for 30% of luxury purchases in the
world. The Chinese government have placed stringent measures to curb grey market
while attempting to stimulate domestic consumption (Clemes, Gan and Zhang 2010).
The Luxury retail market in China is characterized by e-commerce and mobile
shopping as one of their influential sales channels. Several players have since adopted
social networking sites as their marketplace to influence trends in the luxury retail