What: Coresight review the department store situation in China and tries to define a general direction for the market.

Why it is important: China continues to remain opaque and it is difficult to have an accurate and precise vision of the market. This report is no exception as, while it provides interesting data, it mixes several store formats and therefore does not fully address the department store situation. It is interesting also to note that Beijing Hualian Group (SKP) is not mentioned in the report, while SKP is the leading department store in the world.

In 2022, sales of department stores in China declined by 7.9% to $126.5 billion due to factors such as the shift towards e-commerce and increased competition from domestic and international retailers. In the coming years, department store sales are expected to grow at low-single-digit rates annually, resulting in a CAGR of 0.6% from 2022 to 2027.

Despite the challenges, there are positive factors driving department store sales in China, including cultural traditions and festivals, government policies supporting retail sector development, and consumers' urbanization. However, department stores also face hurdles such as lower consumer traffic, sluggish economic growth, and a high youth unemployment rate.

The department store sector in China is fragmented, with Shanghai Bailian Group leading the sector, followed by Chongqing Department Store and Easyhome New Retail Group. Many of the top 20 department store groups in China experienced declining sales in 2022.

To innovate and enhance offline shopping experiences, department stores are adopting various technologies, including self-service payment systems, member recognition systems, and interactive screens.

Looking ahead, department stores in China are expected to focus on growing their online sales, leveraging data-driven insights, and increasing online reach and shopper engagement. Embracing digital transformations and meeting evolving consumer demand will be crucial for their success in the future.

The report includes data from Shanghai Bailian Group, Chongquing Departmznt Store Co, Easyhome New Retail Group, Rainbow digital Commercial Co, Wangfujing Group, AEON, Liqun, Dashang Co, Chang Chun Eurasia Group, Wushan Group Co, Hefei Department Store group, Golden Eagle, Inzone, Wuxi and others.

The state of department stores in China