In 2005, China retail industry continued to maintain a steady and rapid growth and the total retail sales of social consumer goods reached RMB 6.7177 trillion, increased by 12.9% over 2004; it is forecasted that the retail market capacity could achieve RMB7.6 trillion for 2006; in 2007-2010, the average annual growth rate of China retail industry is expected to up to 14% and the retail market capacity will be expected to reach RMB 8.6 trillion in 2007 and RMB 12.81 trillion in 2010.

Statistics and forecast of total retail sales in China, 2000-2010

As for the regional distribution of China retail industry, the most developed area locate in east China, which shares over 1/3 of the whole retail market in social consumer goods retail; the market shares in north China, south China and central China all exceed over 10%; but the west China lags far behind, accounting for less than 5%.

Regional Distribution of Social Consumer Goods Retail in China, 2005

M & A cases frequently happen in China retail industry since 2006 and M & A has become the major measure for strategic investment in retail industry. It is forecasted that the M & A will keep its high frequency in the next 3-5 years, so great changes will take place in domestic retail market pattern.

Along with the opening-up of domestic retail market, foreign-owned retail companies will take action for cross-region M & A in order to capture more market shares and then control the regional markets. And moreover, they will achieve their expansions via M & A instead of joint venture.

As far as regional retail market is concerned, the retail business resources in second-tire and third-tire cities of China will become the target of merger and acquisition in the coming days. But the chain retail companies or department stores in developed areas like Beijing, Shanghai and Nanjing have difficulties in realizing cross-region development as well as net profit growth, therefore, they might be merged or acquired by foreign or private capitals.

Starting with the status quo of China retail industry, this report gives an in-depth analysis on the motives, characteristics, trend and problems of merger and reorganization in Chinese retail industry. It also analyzes the development status and merger trend of key home-and foreign-funded retail enterprises in Chinese retail market and elaborates the regional merger and reorganization. Finally, it points out the risks existing in merger and reorganization of retail market.

2. Analysis on merger and reorganization of China retail industry
2.1 Motives 
2.1.1 To succeed with scale effect in retail market 
2.1.2 Entry of foreign capitals leads to fierce competition 
2.1.3 Retail industry enters integration period 
2.1.4 Effects of M&A on participators in retail industry 
2.2 Trend and Characteristics 
2.2.1 Modes 
2.2.2 Trend 
2.3 Influencing factors 
2.3.1 Policies
2.3.2 Capital 
2.4 Problems 

3. Major home-funded retail enterprises 
3.1 Shanghai Bailian Group Co., Ltd 
3.1.1 Production and sales capacity
3.1.2 Operation status 
3.1.3 Development strategy 
3.1.4 Status on merger and reorganization 
3.2 Dalian Dashang Group Co., Ltd 
3.2.1 Production and sales capacity
3.2.2 Operation status
3.2.3 Development strategy
3.2.4 Status on merger and reorganization
3.3 GOME Electrical Appliances Holding Ltd.
3.3.1 Production and sales capacity
3.3.2 Operation status
3.3.3 Development strategy
3.3.4 Status on merger and reorganization
3.4 Shandong Sanlian Commerce Co., Ltd 
3.4.1 Production and sales capacity
3.4.2 Operation status
3.4.3 Development strategy
3.5 Beijing Wangfujing Department Store (Group) Co., Ltd
3.5.1 Production and sales capacity
3.5.2 Operation status
3.5.3 Development strategy
3.5.4 Status on merger and reorganization
3.6 Beijing Wumart Stores, Inc.
3.6.1 Production and sales capacity
3.6.2 Operation status
3.6.3 Status on merger and reorganization
3.7 Suning Appliance Chain Store (Group) Co., Ltd 
3.7.1 Production and sales capacity
3.7.2 Operation status
3.7.3 Development strategy
3.8 Hualian Supermarket Co., Ltd 
3.8.1 Production and sales capacity
3.8.2 Operation status
3.8.3 Development strategy
3.9 Lianhua Supermarket Holdings Co., Ltd  
3.9.1 Production and sales capacity
3.9.2 Operation status
3.9.3 Development strategy
3.9.4 Status on merger and reorganization

4. Foreign-funded retail enterprises 
4.1 Wal-Mart 
4.1.1 Company profile 
4.1.2 Development status in China 
4.1.3 Trend of merger and reorganization 
4.2 Carrefour 
4.2.1 Company profile
4.2.2 Development status in China
4.2.3 Trend of merger and reorganization
4.3 LOTUS 
4.3.1 Company profile
4.3.2 Development status in China
4.3.3 Trend of merger and reorganization 
4.4 METRO 
4.4.1 Company profile
4.4.2 Development status in China
4.5 Vanguard 
4.5.1 Company profile
4.5.2 Development status in China
4.5.3 Trend of merger and reorganization
4.6 Suguo 
4.6.1 Company profile
4.6.2 Development status in China
4.7 Trust-Mart 
4.7.1 Company profile
4.7.2 Development status in China
4.8 Parkson 
4.8.1 Company profile
4.8.2 Development status in China
4.8.3 Trend of merger and reorganization
4.9 Macro 
4.9.1 Company profile
4.9.2 Development status in China

5. Regional merger and reorganization of China retail industry 
5.1 Overview on regional development of China regional industry 
5.1.1 Overall analysis 
5.1.2 Assessment on regional markets of retail enterprises 
5.1.3 Characteristics of regional development 
5.2 North China 
5.2.1 Development Overview of regional retail industry 
5.2.2 Status of major regional retail enterprises 
5.2.3 Trend of regional merger and reorganization 
5.3 East China 
5.3.1 Development Overview of regional retail industry
5.3.2 Status of major regional retail enterprises
5.3.3 Trend of regional merger and reorganization
5.4 Central China 
5.4.1 Development Overview of regional retail industry
5.4.2 Status of major regional retail enterprises
5.4.3 Trend of regional merger and reorganization
5.5 South China 
5.5.1 Development Overview of regional retail industry
5.5.2 Status of major regional retail enterprises
5.5.3 Trend of regional merger and reorganization
5.6 Northeast 
5.6.1 Development Overview of regional retail industry
5.6.2 Status of major regional retail enterprises
5.7 Southwest
5.7.1 Development Overview of regional retail industry
5.7.2 Status of major regional retail enterprises
5.8 Northwest
5.8.1 Development Overview of regional retail industry
5.8.2 Status of major regional retail enterprises
5.8.3 Trend of regional merger and reorganization
5.9 Summary 
5.9.1 Appraisal on development of regional retail industry
5.9.2 Trend of regional merger and reorganization 

6 Risks of merger and reorganization of retail industry
6.1 Risk analysis 
6.1.1 Assets reorganization 
6.1.2 Human resource 
6.1.3 Management 
6.1.4 Corporation culture 
6.1.5 Operation 
6.2 Principle in merger and acquisition of retail industry 
6.3 Integration after merger and acquisition 

7. Conclusions