There are two mainstream definitions of retail industry: one is from the perspective of marketing: retail industry refers to any individual or company engaged in product marketing activities from producers to consumers. They buy goods from wholesalers, middlemen or manufacturers and then sell them directly to consumers. This definition is very common in marketing literature in recent thirty years. The other is the definition of the US Department of Commerce: the retail trade industry includes all entities that sell a small amount of goods to the general public.
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The expansion of scale will greatly reduce the operating costs of enterprises and produce economies of scale. China's retail industry has not yet formed the scale as that of foreign retail industry. It only improves the comprehensive gross profit margin to a certain extent, but various operating expenses remain high, resulting in a net profit margin far lower than that of international giants such as Carrefour and Wal-Mart. The high operating cost is attributed to two aspects. Externally, it is because of the high cost of domestic logistics. Internal factors are due to high sales and management costs.
The management of China's commercial enterprises mainly relies on traditional management methods and lacks innovative ability. Lack of market segmentation, lack of standardized management in product mix, service standard, price, promotion and store layout. What is particularly prominent is that there is no high-tech support, mainly due to the low degree of informationization.
Enterprise management does not use modern electronic information technology. Foreign commercial enterprises take management information system, electronic data processing system and decision support system as the core, forming automatic management assisted by network, which is completely different from the traditional retail business model.
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