Micro Retail Enterprise in China: Healthier and More Mature

Micro Retail Enterprises (MREs) in China play an important but underappreciated role in China's economy. The authors built on the published results of a survey of MREs conducted the previous year. The authors surveyed 2,174 MREs in four cities in China in an effort to determine their access to both formal and informal sources of credit, use of credit cards and mobile payments (m-payments), entrepreneurship and business strategy. While some trends remain the same, at least two significant findings emerge: insights on access to loans and the fast rise of m-payments. While less than 8% of MREs have been successful in securing a traditional business loan from one of the state-run banks, approximately two-thirds of MREs have found ways to access credit, most commonly with loans from family and friends. Implications of this are explored and it is argued that better access to business loans for MREs would help this sector mature. On the positive side, m-payments have exploded in popularity over a very short period of time. Almost 90% of MREs accept at least one form of m-payment and owners report the importance of them for business growth. It is argued that m-payments may represent a form of leapfrogging technology which will spur growth in this sector.