What: China's retail landscape is experiencing a strategic shift towards digital innovation and service consumption, backed by government initiatives to create a unified national market.

Why it is important: The developments highlight the growing importance of balancing digital advancement with sustainable practices while maintaining competitiveness in both domestic and international markets.

China's commercial sector is undergoing a significant transformation, characterised by the integration of digital technologies and evolving consumer preferences. With retail sales projected to reach ¥44.2 trillion in 2024, the market demonstrates remarkable resilience despite economic challenges. Digital innovation stands at the forefront, with 230 million users embracing AI-powered retail solutions and major cities allocating 16% of retail space to digital experiences. Consumer behaviour is shifting notably towards experiential retail and sustainability, with 85% of shoppers prioritising eco-friendly practices. The government's commitment to creating a unified national market has streamlined commerce while supporting domestic consumption growth. Traditional retailers are adapting to intense competition through innovative business models, while e-commerce platforms engage in strategic expansion both domestically and internationally. The integration of online and offline channels continues to evolve, with service consumption emerging as a key growth driver, particularly in sectors like tourism, culture, and health services.

IADS Notes: Recent market developments underscore China's retail transformation throughout 2024. In January, Coresight Research identified digital innovation and meaningful consumption as key trends , while April saw major cities dedicating significant retail space to entertainment zones . The sector's evolution continued with SKP's successful expansion in Wuhan in August , demonstrating the viability of integrated online-offline models. By December, China's retail AI adoption reached 230 million users , while cross-border e-commerce showed remarkable growth despite regulatory challenges . These developments align with broader trends in experiential retail and digital transformation, suggesting a mature market increasingly focused on innovation and consumer experience.

Ten higlights of China’s commercial sector in 2025