If the global retail industry were a marathon, the 2023 fiscal year would undoubtedly be one of its most challenging legs. The shadow of inflation and subtle shifts in consumer behavior added layers of uncertainty to the race. Deloitte's "2025 Global Retail Powers" report serves as a comprehensive playbook, revealing how retail giants are navigating this complex landscape through four key strategies: strategic operational efficiency, AI-driven transformation, sustainability practices, and alternative revenue streams.

Global Retail Performance: Slower Growth, Stronger Profits

The report indicates that the world's top 250 retailers generated $6.03 trillion in revenue, marking a 3.6% year-over-year increase. While growth slowed compared to previous years, profitability improved, with a composite net profit margin of 3.7%. This underscores retailers' focus on operational optimization and cost control amid external pressures.

Market concentration intensified, with the top 10 retailers accounting for 34.9% of total revenue. However, only one Chinese company made this elite list, highlighting the challenges Chinese retailers face in global expansion. This presents both a hurdle and an opportunity for China's retail sector to assert itself more prominently on the world stage.

The Top 10 Retailers: U.S. Dominance and the Rise of Discount Retail

The global top 10 remained relatively stable, dominated by seven U.S. companies. Walmart, Amazon, and Costco retained their top three positions for the third consecutive year, showcasing their market dominance across traditional retail, e-commerce, and membership warehouse models.

Germany's discount retailers, Schwarz Group and Aldi, stood out, with Aldi climbing to seventh place. This reflects growing consumer demand for value-driven shopping amid economic pressures. China's JD.com ranked eighth, slipping one spot from the previous year.

While only Walmart, Costco, and Aldi operate physical stores in mainland China among the top 10 foreign retailers, their influence—particularly in membership models—remains significant, driving innovation among domestic players.

China's Retail Landscape: Domestic Strength, Global Lag

Thirteen Chinese companies made the global 250 list, contributing $282.6 billion (4.7% of total revenue). Chinese retailers excel domestically, benefiting from the country's vast population and rising consumption. However, their overseas business accounts for just 18.1% of revenue, below the global average of 25.9%, indicating slower internationalization relative to China's economic stature.

Chinese Retailers in Transition

• JD.com: Ranked as China's top retailer but slipped globally, its founder acknowledged lost momentum, prompting diversification efforts.
• Alibaba: Shifted from "self-operated" to "platform-enabled" models, divesting assets like Intime and RT-Mart.
• SHEIN: Achieved an 88.2% CAGR (2018–2023) with its on-demand fashion model but faces sustainability challenges.
• Others: Vipshop leverages AI and exclusives; Lao Feng Xiang thrives in jewelry; Yonghui and Wumart adopt discount strategies.

Overall, China's retail sector is transitioning from scale-driven growth to quality-focused development.

Four Key Trends Shaping Retail's Future

Deloitte identifies four transformative trends:

1. Strategic Operational Efficiency

Retailers are optimizing inventory, enhancing omnichannel services (e.g., same-day delivery, BOPIS), and automating up to 70% of store tasks by 2025. "Supply chain as a service" (SCaaS) models are gaining traction to reduce costs.

2. AI-Driven Transformation

Nearly 98% of retailers plan to invest in generative AI (GenAI) for personalized recommendations, dynamic pricing, and content creation. Stores are deploying digital signage, smart carts, and VR/AR for immersive experiences.

3. Sustainability and Circular Economy

Re-commerce (trade-ins, repairs) is rising, appealing to eco-conscious younger consumers. Brands are prioritizing sustainable packaging and waste reduction.

4. Alternative Revenue Streams

Retail media networks are projected to exceed $165 billion in ad spend by 2025. Some retailers are monetizing their tech expertise via "capability-as-a-service" offerings.

The report paints a vivid picture of a sector in flux, where adaptability and innovation will separate the leaders from the laggards. For Chinese retailers, balancing domestic opportunities with global ambitions remains a critical challenge.