Overall, AmCham China member companies in the Retail & Distribution industry share the assessment of the business climate in China with foreign business in other sectors. When asked to compare forecasted revenue for 2015 as compared to 2014, Retail and Distribution companies responded almost exactly the same as all other respondents, though a greater proportion reported a decrease in their EBIT margins. However, no companies reported losses in financial performance in China in 2015, with 89 percent having reported profits.
For the next two years, industry respondents indicated strong optimism about domestic market growth in China. Nevertheless, significant challenges remain including inconsistent or unclear laws and regulations and intellectual property rights infringement. In addition, Retail & Distribution companies report RMB volatility, a top challenge, along with Automotive & Transportation Vehicles respondents. Half of Retail & Distribution respondents do not plan to expand investment in China operations for 2016 primarily due to the expectation of slower growth in China and the existence of faster-growing markets in other geographies.
Key Points of this Report:
- Difficulty terminating employees is the top human resource challenge, followed by rising salary and wage expectations and difficulty attracting skilled executive or managerial staff.
- Only 14 percent of industry respondents report that recent changes in Chinese government policies and the enforcement of said policies have weakened the business environment.
This report distills industry-specific data from the full 2016 BCS Report, reflecting the business climate for this specific industry.