In recent years, the digital economy in China has experienced substantial growth, emerging as a new catalyst for economic expansion. As the digital economy continues to advance, it is poised to play an increasingly significant role in enhancing the quality of development in the retail industry. This trend gained further momentum, particularly in the aftermath of the epidemic, compelling many retailers and businesses with multiple stores to fortify their online sales and engage in platform economy development.
A notable shift in consumer behavior has been observed, with a growing preference for online channels, allowing them to make purchases from the comfort of their homes. Companies such as Freshippo, Dingdong and Pinduoduo have witnessed rapid development, with their platforms maturing over recent years. The key to sustaining the differentiated business model of retailers in the future lies in leaders seizing opportunities amidst intense competition and propelling into a phase of rapid development. They should push for quick growth by combining strategies involving policy environment, technological innovation, and shifts in customer preferences.
At the same time, the ability to leverage data has become a critical factor for cost reduction, especially in terms of managing labour costs. Through the integration of business and manpower data, retailers can mitigate management challenges prevalent in their industry.
Difficulties in retail manpower management:
- There are many stores, each with a large number of employees
Many retail enterprises are spread across multiple cities within the country, with differing HR policies in each locale which can lead to diverse employee needs. Leaders often struggle to familiarise themselves with these local policies, resulting in challenges in employee management. Therefore, many retail enterprises opt to collaborate with professional human resources service companies. With the help of specialised online platforms, employee data can be centralised, enabling registration and grouping for analysis. It also allows leaders to stay abreast of employee contract statuses and latest local HR policies in real-time, facilitating more effective and precise employee management.
- Large proportion of employee turnover
The turnover rate of frontline employees in the retail industry is relatively high. An online data platform can monitor employee turnover rates and reasons for leaving, providing valuable data support and guidance for managers to excel in employee retention efforts. Professional human resources companies can provide enterprises with salary reports, allowing them to precisely assess market salary levels and consistently enhance their salary structures. Moreover, to reduce the time costs associated with high turnover rates, human resources institutions can efficiently manage employee turnover procedures online, alleviating concerns for managers.
- Complex shifts and frequent cross-store work
The retail industry operates differently from many other sectors, requiring employees to be available for extended periods to ensure seamless online or offline services. This results in multiple shifts with significant variations. Additionally, due to shifts in each store’s business focus, cross-store work has become a common practice among employees. Managing these changes would require managers to invest more time in organising and overseeing employee schedules. Therefore, an increasing number of retail businesses are partnering with comprehensive human resources online platforms. These platforms aid in creating scheduling plans and managing attendance across various stores, alleviating the burden on managers and ensuring efficient operations through professional oversight.
- Insufficient high-quality employees
Competition within the retail industry intensifies with each passing day. To maintain market share, company leaders must make precise decisions. Effectively cultivating a reserve of high-quality talent is a key focus for enterprise human resources departments. Given the low entry threshold of the retail industry and the limited comprehensive abilities of most employees, enhancing employee quality requires more than just on-the-job training. It necessitates providing professional and conceptual training to the current personnel while also sourcing leading employees from the market to expand the talent pool through multi-channel recruitment efforts. Continuously accessing talent inventories based on employee performance facilitates the development of targeted talent development plans.
SBA Stone Forest offers clients a comprehensive human resources solution tailored to the retail industry. Our services encompasses a wide range of human resources functions, including recruitment, self-service entry and exit, job management, contract management, personnel processes, salary administration, attendance scheduling, vacation management, performance evaluation, and commission management.
We invite you to reach out to us for more information or to discuss how we can assist you!
CHINA UPATES
Accounting and Taxation
- To expedite the progress of the Hengqin Guangdong-Macao Deep Cooperation Zone, the Ministry of Finance (MOF) and the State Taxation Administration (SAT) issued the “Notice on Adjusting the Scope of Goods for Value-added Tax and Consumption Tax Refunds in Hengqin Guangdong-Macao Deep Cooperation Zone” on 11 January 2024. The key points are outlined as follows:
Goods originating from the Mainland and entering the Cooperation Zone through the "second line" are considered exports and are subject to value-added tax and consumption tax refunds. However, the following goods are excluded:
- Export goods not eligible for VAT refund (exemption) or tax exemption under the policies as stipulated by the MOF and the SAT;
- Specific goods sold from the Mainland to the Cooperation Zone that are not subject to tax refunds. Please refer to the appendix for the list of specific goods; and
- Goods purchased by enterprises whose tax refund or exemption qualifications have been revoked in accordance with relevant regulations.
The notice comes into effect upon the date of acceptance of relevant supervision facilities in the Cooperation Zone and the official closure of Customs.
Note: The "second line" is established between Hengqin and the rest of the territory of the People's Republic of China, excluding the Macao Special Administrative Region.
Human Resources
- On 2 January 2024, the Shanghai Municipal Human Resources and Social Security Bureau issued the “Notice on the Occupation (Job Type) List of Highly Skilled Talents in Urgent Need in Shanghai (2024).” The aim is to bolster the development of skilled talent in Shanghai by cultivating and attracting highly skilled individuals urgently required and in short supply in the city. In line with the spirit of the implementation opinions outlined in Document No. 345 of Hurenshezhi (2023), jointly issued by 23 departments including the Shanghai Human Resources and Social Security Bureau, which focuses on strengthening the construction of highly skilled talent in the new era, the list targets three leading industries, key manufacturing sectors, shipping services, primary and tertiary industries, and other relevant fields.
Following extensive collection, expert review, and assessment, the occupation (job type) catalogue of highly skilled talents urgently needed in Shanghai for 2024 has been released. Occupations (Job Type) listed in this catalogue are eligible for policy support regarding talent acquisition in Shanghai as per regulations. Furthermore, efforts will be made to enhance the development of highly skilled talent in the catalogue, with adjustments made dynamically based on the requirements of economic and social development.
Corporate Governance
- The Standing Committee of the 14th National People's Congress voted to adopt the newly revised Company Law of the People's Republic of China (“new Company Law”) at its seventh session on 29 December 2023, which will take effect on 1 July 2024. The most significant change introduced by the new Company law is the enhancement of the capital subscription registration system for limited liability companies.
According to the new Company law, for a limited liability company registered and established after its implementation, all shareholders must fully pay up their subscribed capital within five years from the company's establishment date specified in its articles of association. Furthermore, if a limited liability company was registered and established before the implementation of the new Company Law, and its capital payment schedule exceeds the time limit prescribed in the new law, the schedule must be gradually adjusted to comply with the specified time limit, unless otherwise stipulated by laws, regulations, or provisions issued by the State Council.
Consequently, foreign-invested enterprises are advised to determine the amount of their registered capitals based on their business requirements. They may adjust their registered capitals or explore alternative measures to ensure compliance with the provisions of the new Company Law.
Contact Us
Yeo Lee Soon
China Business Advisory, Singapore
YeoLeeSoon@RSMSingapore.sg