Chinese Consumers' Store Image Formation and Its Impact on Patronage Behavior‪.‬

INTRODUCTION The Chinese economy has sustained continuous growth, and so has its consumer market. Containing twenty-five percent of the world's population, who most importantly, have money to spend, this market attracts much attention from international retailers. According to National Bureau of Statistics of China, total retail sales of consumer goods reached 15455.4 billion yuan in 2010 (approximately 2.3 trillion in US dollars), an annual growth rate of 14.8 percent after deducting inflation factors. China tripled its total retail sales since 2005 (National Bureau of Statistics of China, 2011). In the meantime consumer income has also risen. Per capita disposable income of urban households grew by 7.8 percent in 2010 (National Bureau of Statistics of China, 2011). With the rise of the middle class, Chinese consumers also become more sophisticated. Convenience and store layout have replaced price to become the primary motives for shopping (Powers, 2005). On the other hand, various restrictions on foreign investment in the retail sector such as geographical limits and maximum number of outlets were removed. A new measure of foreign investment in the commerce sector has taken effect which allows foreign retailers to establish solely owned foreign retail stores and allows international retailers to enter the secondary and tertiary market (Ness, 2005). As a result, competition has intensified both among foreign retailers (e.g. between Walmart and Carrefour) and between foreign and domestic retailers. Retailers, foreign and domestic alike, must study Chinese consumers carefully to be able to respond to their changing lifestyles and needs with the goal of succeeding in that market (Powers, 2005).