While China’s retail market continues to expand, retailers are at risk of being squeezed in top tier cities by market saturation and e-commerce.

First- and second-tier cities are facing market saturation of luxury goods, say two researchers at Fitch Ratings via the Shanghai Times. Deceleration in same-store sales growth is being attributed to the government crackdown, weaker economic growth, and the rise of online shopping.

Some department stores in Beijing and Shanghai experienced contraction in same-store sales in 2012 and the first half of 2013, said Michelle Leong based in Hong Kong and Jeong Min Pak based in South Korea in a joint statement. Retailers have gone to extreme measures in some instances to protect their market shares.

Source Red Luxury