The Transforming Structure of Competition in China's Retail Industry

Abstract

Although academic attention has been paid to the changes occurring in China's retail industry, little attention has been given to the transformation of the competitive structure taking place there. The purpose of this paper is to help fill this gap. A Porter's five forces model and secondary data are used in the analysis. It appears that a highly protected industry has been transformed into a highly competitive industry. New entrants, triggered by lowered entry barriers resulting from the relaxation of government policies, played a critical role in starting the industry transformation. Other forces, and their interactions, appear to have increased the speed and intensity of these changes.