The emergence of supermarkets with Chinese characteristics: Challenges and opportunities for China's agricultural development

Abstract

The supermarket revolution is spreading faster in China than anywhere else in the world. Supermarket sales are growing by 30-40% per year, 2-3 times faster than in other developing regions. This development has been driven by factors shared by other developing countries as well as by China-specific policies. It presents opportunities for Chinese agricultural producers to diversify into activities with higher income prospects, and for procurement systems to move into dealing directly with farmers. However, supermarket managers face several unique challenges: average farm size is small and farmers are not well organised. Hence, the whole supply chain must be upgraded, and government agricultural policy and rural development programmes have an important role in this. © Overseas Development Institute, 2004.