The ‘truly exceptional' Olympic Games presented by China has allowed the world to witness that China is one of the world's most attractive destinations for investment, especially in their fast-growing retail sector. The 16th Asian Games scheduled in Guangzhou and World Expo 2010 in Shanghai are expected to drive growth within the Chinese retail sector even further.
However, KASIKORN RESEARCH CENTER (KResearch) views that although the Chinese retail sector is still attractive to international investors, thanks to numerous supporting factors such as a huge population, fast economic growth and many affluent consumers, Thai investors thinking about taking a plunge into their market are advised to be cautious about the ferocious competition there. Aside from this, Thai investors should not overlook the recent jump in operating costs in China, while problems arising from the income gap between the rich and the poor remain a challenge for the Chinese authorities. Additionally, there are also legal and regulatory barriers that Thai investors must overcome. In order to penetrate the Chinese retail market successfully, Thai investors are advised to study this market carefully because it is rather fragmented, meaning consumer behavior and preferences do differ substantially from one province to another. Therefore, different business strategies and tactics are needed for specific regions.
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