E-retail’s Impact On Physical Retail:Status Que,Game And Strategy

The current slowdown in sales growth of physical retail in China has been influenced by the slowdown in economic growth, the impact of e-retail, continuous rise in price and other factors. The2012Top100Retail Chain Enterprises list issued by China Chain Operation Association, showed that in2012, the sales growth of top100physical retail chain enterprises is only11%, which is the lowest growth rate since2005, and9.9%lower than that of2011, at the same time, it is also2.2%lower than2009during the financial crisis. Tmall, Jingdong, Tencent B2C, Amazon China, Dangdang, Vipshop, Yihaodian and Vancl are eight e-retail enterprises among the2012top100retail chain enterprises list, their average sales growth has been reached134.1%,113.9%higher than the overall top100retail chain enterprises sales growth. Another typical example is that on November11th,2012, daily sales of Taobao was19.1billion RMB, which was higher than the annual sales of Wangfujing Department Store (18.264billion RMB), which is one of the biggest retail group in China. Slowdown in sales growth, cost rise in manpower and rent, influenced by these comprehensive factors, several retail giants have joined in shop closing tide, including domestic well-known brands and even world-class retail giant, such as War-Mart, Tesco and so on. The closing tide can reflect the business distress and slump of physical retail. The healthy development of physical retail has important influence on residents’living quality, social harmony and the healthy development of national economy. E-retail’s impact on physical retail has raised an extensive attention form all sectors of the society, therefore, having a study on e-retail’s impact on physical retail, through empirical analysis, put forward constructive countermeasures, which have important theoretical and practical significance.This paper mainly studies the e-retail’s impact on physical retail. Domestic studies on this subject mainly confined to revealing the phenomenon and comparing statistical data. On the basis of previous studies, this paper set a duopoly Bertrand model with certain differences in products, and provided theoretical support for domestic e-retail and physical retail development. This paper has carried on a questionnaire research on college students’behavior on e-retail and physical retail shopping. Through analyzing the research data, this paper has put forward constructive suggestions for physical retail to cope with the impact of e-retail actively, and constantly promote the harmonious development of e-retail and physical retail, to achieve mutual benefit, so that they can provide better service to residents, and promote the development of national economy.At the beginning, this paper analyzed the present situation of e-retail and physical retail, and then set a duopoly Bertrand model with certain differences in products to have a dynamic game theory analysis, and finally, did a questionnaire research on Dalian college students’behavior on e-retail and physical retail shopping. The research data showed that the commodity price, category, true or fake and the convenience of trying on, changing and refunding are the major factors that influence consumer’s choice. At the meantime, the convenience of shopping and complaining are also big factors. At the end of the paper, this paper have put forward three countermeasures, first, carrying out online retail from scratch; second, organic combination of online and offline; third, providing value-added services except for shopping. The e-retail impacts are both threats and opportunities for physical retail. E-retail will not completely replace physical retail. In the short term, e-retail is impacting physical retail, but in a long term, the soaring e-retail will step into a mature stage of development with the regulations and policies implemented by government becomes more complete, so they can complement each other, and gain mutual benefits.There are two innovative points in this paper:first, this paper set a duopoly Bertrand model with certain differences in products according to the characteristics of e-retail and physical retail to have a systematic analysis; second, this paper have done a questionnaire research on Dalian college students’behavior on e-retail and physical retail shopping, and selected ten schools in Dalian as sample schools. Through the research data, this paper has put forward several constructive suggestions for physical retail to cope with the impact of e-retail.