On Growth Efficiency Of China's Retail Industry

The leading role of retail industry on the national economy is gradually growing, andthe contribution to the national economy is gradually increasing, but since2012, salesgrowth of retail industry have begun to less than10%, and entered a period of slow growth,the extensive development through shop expansion and the increase of the scale in the pastwill be replaced by the intensive development, high growth era of the retail industry iscoming to an end. The retail industry has begun to transform the mode of development, thekey is to from the pursuit of quantity in the past to the importance of quality improvementin the future, to achieve this change, improvement of the efficiency of retail industry is thefundamental, technical efficiency, technological progress will be to achieve sound andrapid development and boost retail. Therefore, under the total factor productivity (TFP)framework, Therefore, this paper employs modern economic theories and analysis toolsand methods to theoretically and empirically study on the growth efficiency of China’sretail industry, and then puts forward some policy suggestions to promote the growth andefficiency of the industry.The paper firstly introduces the theory of economic growth, circulation economy andretail industry, and the Stochastic Frontier Approach (SFA) and Data EnvelopmentAnalysis (DEA), so as to provide a general theoretical foundation and methodological toolsfor the research. Then, the growth status of China’s retail industry during1993-2012isanalyzed from two aspects of total amount and structure. From the perspective of totalamount, the retail industry has maintained a relatively high growth rate, The retail industryaccounted for the proportion of GDP and remains stable and absorbs employment in anincreasingly important role. From the perspective of structure, the rate of chain in the cityretail market is higher than that in the rural, regional differences of chain developmentexist in China; retail formats in China mainly contain such as supermarkets, departmentstores, convenience stores, specialty stores, specialty stores, shopping malls, warehouseclub stores, online stores and other forms, the majority of enterprises adopt multi formatretail business; from the perspective of ownership structure, the scale growth of foreignretail enterprises is higher than domestic retail enterprises. Analysis of retail growth byprincipal component analysis shows that the development of China’s retail industry atpresent also relys mainly on scale, but the labor efficiency, trade and logistics are still weak.Then, the paper empirically studies on the growth efficiency of China’s retail industry.First of all, the paper uses stochastic frontier approach of translog production functionto empirically analyze the technical efficiency changes of China’s retail industry, and discusses its influencing factors, then tests the convergence of the technical efficiency. Theresult shows that, first, the technical efficiency of China’s retail industry is low, and it isstill far from being using the available resources and technologies, Second, there aresignificant regional disparities in technical efficiency. The East has the highest growth rate,followed by the middle, while the west is negative growth. In addition, provincialdifference in TE is also obvious.Third,The local logistics development level, residentsconsumption ability, foreign investment and human capital are important factors toinfluence the technical efficiency of China’s retail industry.And then, the paper applies DEA-based Malmquist index to estimate the total factorproductivity growth of China’s retail listed corporations, and uses panel regression toanalize the factors that influence the efficiency,the results show that, first, tfp changes inChina’s retail industry listed corporation come mainly from the technical efficiency; second,from the perspective of regional, the development of retail industry is unbalanced, thechange of the technical efficiency in various districts is higher than that of the technologyprogress, total factor productivity growth has significant regional differences; third, fromthe perspective of retail formats, more than60%listed companies are department stores,supermarkets; fourth, panel regression results show the efficiency of the retail listingcorporation has a significant positive correlation with intangible assets ratio, ownershipconcentration, stock turnover rate, and shows a significant negative correlation with assetliability ratio.Then, the paper compares the productivity of domestic and foreign retail industrybased on DEA-Malmquist productivity index, and deeply analyzes the reasons of domesticand foreign retail efficiency difference. Research shows that, the TFP of foreign retailindustry grows larger, technical progress of foreign retail industry is significantly higherthan that of domestic retail industry, and becomes the main factor to promote the retailindustry. The paper analizes the causes of low efficiency of domestic retail are as follows,first, American per capita consumption capacity is much higher than that in China, whichhas a direct impact on retail output level, this condition affects the retail efficiency; second,American retail industry is in the mature period of industrial development, retailenterprises operate steadily, with higher profitability and growth efficiency; and China’sretail industry is in the growth period of industrial development, retail enterprises operatein disorder,compete fiercely between the format, and lack leadership strength enterprise, sothat the overall profitability and growth efficiency of retail industry is low; Third, theinformatization level of China’s retail industry is far behind the developed countries; fourth, the overall scale of retail enterprises in our country is generally small, with low efficiency;fifth, the degree of the chain retail business in our country is low, restricting the scale、organized retail enterprise development; sixth, large supermarkets of our countrycommodity has similar species; finally, record of formal schooling of China’s retailindustry practitioners is generally low.At last, the online and offline retail enterprises are selected,1shop and Yonghuisupermarket, compares the efficiency of them,and obtains three suggestions for thedevelopment of reference for other enterprises, first is to develop differentiated competitiveadvantage; second is the efficient supply chain management; third is o2o development.The paper shows that, although China’s retail industry has technical efficiency andtechnical progress driven characteristics, but the growth of both are slow, so resulting in alow growth rate of total factor productivity. The retail industry should not only makeinnovations in the systems and mechanisms to promote higher technical efficiency; butalso strengthen technical innovation and technical progress to achieve continuousupgrading of retail technology.To achieve this, the corresponding policy recommendations are put forward:first,improve the retail industry informatization level; second, strengthen the human capitalinvestment, improve the quality of employees; third, improve the organization level ofretail enterprises; fourth, rational planning of retail outlets, reduce the malignantcompetition; fifth, the construction of modern logistics system, to promote thedevelopment of logistics industry growth.