Retailing volume in Beijing is expected to maintain two-digit growth this year, experts predict.

According to the Beijing Statistics Bureau, the capital city's social consumption retailing volume reached 16.26 billion yuan (US$1.96 billion) last month, up 15.4 per cent year-on-year.

During January to August this year, total retail volume amounted to 12.143 billion yuan (US$1.46 billion), 14 per cent higher than the same period last year.

Experts attribute the swift progress in the retailing sector mainly to the rapid development of chain convenience stores and strong momentum of auto sales around the city.

Statistics from Beijing Commerce Committee indicated that, during the first seven months this year, sales volume of chain retailing enterprises, including hypermarkets, supermarkets and convenience stores, reached 24.88 billion yuan (US$2.99 billion), a 17.8 per cent increase compared with the same period in 2002.

Meanwhile, the sales volume for chain-convenience stores hit 670 million yuan (US$80.72 million), 1.1 times of that between January and July 2002.

Yan Ligang, spokesman with the committee, indicated that the SARS outbreak in May resulted in robust growth in the sales from convenience stores.

"Citizens preferred to shop in such small 24-hour chain stores neighbouring their homes for convenience and safety," said Yan.

Sales of automobiles, especially the private cars, gave strong momentum to Beijing's social consumption.

Official sources revealed that, during the first eight months this year, 224,000 cars have been sold in Beijing, up 29.9 per cent by the corresponding period last year.

With the auto-retailing volume amounted to 18.79 billion yuan (US$2.26 billion), a 65.3 per cent increase compared with the first 8 months of last year and made up 15.5 per cent of the city's retailing volume as a whole.

Yan said: "Besides individual revenue increase and SARS element - citizens selecting private cars as an ideal transport tool, the mushrooming of affordable cars and price-cutting strategy of some auto makers do take great influence on the auto retailing market."

Though experts are optimistic about Beijing's social consumption prospect, due to the relatively calm environment and people's purchasing power increase, they point out that some hidden troubles exist.

"The two-digit growth rate was mainly stimulated by auto sales," said Chen Jian, a researcher with the policy study office of Beijing Municipal Government.

Deducting the auto retailing sector, the growth rate of social consumption retailing volume was just 7.9 per cent for the first eight months this year.

"However, because of the coming market saturation and encouraging policy on development of public transportation, the momentum of private car sales may shrink," said Chen.

"We should nourish some new growing points in the retailing market, such as goods related to Olympic Games, involving telecommunication, sports, culture and computer sectors."

In addition, development of Beijing's catering industry lagged behind the nation's average level.

From January to August, retailing volume of catering sector were 7.56 billion yuan (US$910.8 million), making up 6.2 per cent of the city's combined social consumption retailing volume.

However, for the whole country, catering industry contributed 12.4 per cent to the social consumption retailing volume.

"This implied the catering service should enhance service and enlarge scale soon, otherwise, it will affect the city's tourism industry and soft environment of 2008 Olympic Games," said Chen.

(HK Edition 09/13/2003 page7)