Trends in China’s new retail landscape that spell opportunity for corporates and PE firms

July 2019

We have all witnessed how digital advancement and eCommerce have transformed China’s retail landscape and brought incredible growth. Yet, increasingly the question on everyone’s minds now is how much longer digital innovation can further fuel the growth in retail, and what the next growth driver might be. Some would suggest that in the future “new retail” might be the key catalyst to unlock the next wave of retail growth.

Through our extensive retail work in China we have increasingly observed that new retail has extended into broader meanings and applications across the entire industry value chain. It is the mean rather than the end to reflect the constant evolution of customer needs and preferences as driven by social, demographic and technological trends. In this article, we set out to explore three core propositions from our first-hand dialogue with many leading internet giants, retailers and investors.

  • The customer is – and will always remain as – the centre of gravity propelling new retail growth
  • The business implications of new retail go beyond the digital front
  • There is scope for winning in and beyond BAT defined playgrounds

Going forward, there is scope for agile PE buyers to buy or invest in the high growth potential companies in the new retail space. When considering an investment target, PE buyers should ensure the firm has a strong management team and robust business plan and that the investment would result in a strategic alliance. PE buyers would also need to conduct adequate due diligence upfront to ensure that their target investments have the operational capabilities and governance framework to power growth, limit risks and ensure a sound return on investment.

Contact us

Waldemar Jap

Consumer Markets Deals Lead Partner

Tel: +[852] 2289 1892

Michael Cheng

Asia Pacific & Hong Kong/China Consumer Markets Leader

Tel: +[852] 2289 1033

Jacky Lui

Deals Partner

Tel: +[852] 2289 6312

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