Loss prevention directors and department heads from both foreign and local retailers recently gathered at the 6th China Chain Store and Franchise Association (CCFA) Loss Prevention Seminar held in the city of Chengdu in China’s Sichuan province, to share their loss prevention best practices. Foreign retailers and manufacturers included Wal*Mart, Tesco, BestBuy and P&G while local retailer chains included representatives from the Brilliant Group, Wuhan Zhongbai Group and China Resources Vanguard Co., Ltd.

Source Of Shrink In China

Frost & Sullivan, the Growth Partnership Company with over 45 years of experience in partnering with clients to accelerate their growth, provided seminar attendees with a summary of the results of a major market study for Sensormatic. As Frost & Sullivan reported the Chinese retail market grew to an unprecedented $1.18 trillion in 2007, as over 15,000 new stores opened in order to accommodate the high level of consumers anticipated during the 2008 Olympic Games as well as the 2010 Shanghai Expo. Retail growth in China will be over 11% from 2008 to 2012.

This study found that employee theft caused 42.2 percent of the loss in the Chinese retail market and another 29.4 percent was from shoplifters, which remains the second largest source of inventory loss.

"The high percentage of losses from employee theft and shoplifters drives the increased usage of EAS systems in the market," notes Frost & Sullivan Industry Analyst David Ren. "Because the domestic market is just in the infancy stage of its life cycle, the potential for growth is great and the opportunity exists for Sensormatic to educate the market and build brand loyalty." In a growing retail market like China where the technology to protect revenue and enhance profitability is essential, adding CCTV to the EAS platform provides an added layer of loss prevention protection and helps improve retail performance.

Average Shrinkage Rate in China by Retail Sector

To download a summary of the Frost & Sullivan study, please visit http://www.sensormatic.com/cp/FS_Study.aspx.

Frost & Sullivan Chairman David Frigstad believes that as more and more companies look abroad for growth opportunities, "the business intelligence that Frost & Sullivan offers can help Sensormatic further understand the Chinese retail and EAS markets' current and emerging trends and will serve as a basis for future product development and marketing efforts, targeted specifically for the Chinese EAS market."

This study found that employee theft caused 42.2 percent of the loss in the Chinese retail market and another 29.4 percent was from shoplifters, which remains the second largest source of inventory loss.