M&A in China’s Retail and Consumer sector: 2018 review and 2019 mid-year outlook - New retail development and middle-class growth are driving M&A activity

June 2019

Retailers are pursuing growth through mergers and acquisitions both into and out of China, where deal opportunities are set to continue to grow in the coming years. 2019 got off to a flying start in the first quarter, as the number of retail and consumer M&A transactions increased by 31% year-on-year.

After rapid growth in 2016 and a brief downturn in 2017, M&A in China’s retail and consumer sector rebounded in 2018. The value of M&A transactions reached US$59 billion – an increase of 48% on 2017. The volume of deals climbed 32% to 1,031 transactions.

Key findings:

  • Increased consumption brings about new business opportunities
    Mounting uncertainties in the global economy and trade environment mean that China will be increasingly dependent on consumer-led growth. On a medium to long-term view, this will continue to drive M&A activity in this sector. We expect activity to steadily increase in 2019.
  • Convergence of new and traditional business models triggers further momentum
    Digital and bricks-and-mortar business models are converging. This convergence will continue to drive M&A activity in on- and off-line retail areas.
  • Private Equity leads the charge
    Financial investors (private equity funds) have been increasingly active in M&A transactions in major segments such as online retail; food and beverage; and hotel, dining and leisure. These will continue to be active in 2019.

Contact us

Waldemar Jap

Consumer Markets Deals Lead Partner, PwC Hong Kong

Tel: +[852] 2289 1892

Ken Zhang

Advisory Partner, PwC China

Tel: +[86] (21) 2323 3120

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