Logistics and distribution in China's burgeoning retail sector is subject to very different factors than in other Asian, or large geographic markets.

In an interview with McKinsey's Beijing-based Georges Desvaux he states..

"...The overall cost of distribution in China is very high compared to the international average. This is due to fragmentation (e.g., 10,000 distributors in the household appliance sector), multiple layers of distributors and high cost. Many layers of wholesalers within the distribution channel result in high channel costs and high inventory levels. Although each distributor has very low gross margins by world standards, costs remain high since products often go through three or four layers. In some cases, the total inventory of some manufacturers has equalled their annual sales volume..."

This is quite a substantial interview with good advice and ideas on how to work within (and change!) the structures of retail distribution in China.