China's Retail Market Concentration And The Main Influencing Factors Research

With the development of the economy in China, the retail industry which is a linkconnecting the production and consumption is playing a more and more important rolein the national economy. The retail industry began to be open from1992. In the end of2004the government canceled the restrictions on the region, ownership and businessscope for the foreign investment to achieve the full liberalization of the retail industry.At the same time, the mode of chain operation has been developed rapidly andadvanced technology has been promoted and applied. These changes have had animportant impact on the market structure of retail industry in China. Against thisbackground, it is very necessary to analyze the retail market structure in China with therate of market concentration as a starting point. Based on this, analyzing the factorsaffecting the retail market concentration rate and putting forward improvementsuggestions and countermeasures of the retail market structure in China, is also one ofthe purposes of the research.Firstly, the paper makes a brief review on the academic studies on the retailconcentration rate from home and abroad,then derive a preliminary summary. On thebasis of review the evolution and development of western retail trends and thedevelopment process of China's retail industry, this research analyzed the status quo ofChina's retail industry over the past decade. The analysis found that although China'sretail industry has been expanding, the market capacity is growing, a large number oflarge retail chains are coming to the force, and of international level and modernizationlevel has also been enhanced and improved, the scale of China's retail industry is stillsmall, the level of modernization is not high enough and regional development showedsevere imbalance.Secondly, calculate the concentration rate of China's retail industry. Divide thecountry into30provinces and cities, and calculate the concentration rate nationwideusing the weighted average method from the regional market concentration rate. Onthe basis, calculate market concentration rate in the United States over the same periodas the effective market concentration rate of China's retail industry. Comparing thepresent market concentration rate with the effective concentration rate, we can get theconclusion that China's retail market concentration is too low.Thirdly, select the appropriate set of indicators and collect data to analyze thefactors of affecting China's retail market concentration rate using multiple linear regression method of econometrics, we can obtain the conclusion that the rate of chainoperation, the proportion of foreign investment in commodity sales, profit margins andrelated policies are the most important factors,on this basis, analyze why the regionalmarket concentration rate shows significantly difference further.Finally, against the main factors affecting China's retail market concentration rate,we can assume that the government and retail enterprises should work together toimprove the market concentration rate, making the appropriate policies andsuggestions to improve China's retail industry market structure gradually.