Chinese Retailer PCD Enjoys the Boom

While department stores in the U.S. face tough competition from online retailers and big-box giants, the department store chain PCD in China is booming, reports Business Week. PCD has grown rapidly since opening its first store in 1998.

PCD operates 16 department stores and one outlet mall. Earlier this month, it made its Hong Kong trading debut with shares soaring 30 percent, putting the little-known PCD in the industry’s big leagues. The company now has a market capitalization of $1.3 billion, larger than some of the top names in the business,
As the Chinese economy rebounds, shoppers are returning to the country’s stores and investors are driving up the stock prices of Chinese department store chains. Those doing well include Beijing-based Parkson Retail Group, New World Department Store and Intime Department Store Group. Analysts point to how department stores benefit from double-digit growth in the country’s GDP, thanks in part to nearly $600 billion in government stimulus. Beijing has also extended policies to promote consumer spending. In contrast to developed countries, China’s e-commerce industry is still in its infancy and poses less of a threat to old-fashioned brick-and-mortar stores. More immediate danger might come from big-box stores. Best Buy and Walmart, for example, have ambitious China plans that could derail growth for some domestic department stores. However, the geography of Asian cities, more clustered and lacking in suburban sprawl, may mean it’s harder for big-box chains to take root.

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