|
|
|
|
|
|
Foreign Investors Stimulate Shanghai Grocery Sector
By Mabel Zhuang
Backed by foreign investors who are pouring in big bucks (up to $4.4 billion as of 1996), technology and marketing expertise, new and innovative stores are changing the traditional face of Shanghai food markets. By 1996, almost 2,000 foreign-invested wholesalers and retailers had developed two profitable food retail venues: the mega-supermart and the small convenience store.
The big players in
supermarket investments come from France, Hong Kong, Japan,
Germany, the Netherlands and Thailand. While almost two-thirds of
these investors prefer to wholly own their businesses, there are
nearly 50 joint-venture supermarkets in Shanghai. One of the
first was established in January 1996 when the Carrefour Group of
France joined with the Shanghai Lianhua Supermarket Company to
create a joint-venture supermarket.
A year later, Thailand's Charen Pokpand Group opened the EK-Lotus in Pudong (suburb east of Shanghai), which claims to be the largest foreign-invested supermarket with shopping space of 16,000 square meters.
Market Leaders
In the expanding supermarket store sector, which combines "wet" markets, grain shops (state-run food shops that sell staples), mom-and-pop shops and department stores, the Metro chain headlines the large retailers.
German-backed and operating as a wholesaler and warehouse retailer, Metro shrewdly sited its first store at the entrance of the highway between Shanghai and Nanjing to attract customers from Shanghai and Jiangsu and Zhejiang provinces.
Metro's sales average $240,000 daily, handily surpassing downtown department stores that sell only a tenth as much. With a 20,000-product inventory priced 20 percent lower than any competition, this overwhelming success is easy to explain.
Meanwhile, the convenience store sector has carved out a tidy market niche among students and white-collar workers craving efficiency and willing to pay for it.
The Japanese-owned Lawson chain, with 19 new outlets, specializes in popular convenience items including fresh bread, sushi, hot dogs, fried chicken and lunch box meals. The bright, clean stores carry fresh foods processed in the company's factory under strict hygienic standards.
Strategy for Success
Successful companies in this developing market have three characteristics:
_____________________________
The author is the secretary with the Shanghai, China, Agricultural Trade Office. Tel.: (011-86-21) 6279-8622; Fax: (011-86-21) 6279-8336; E-mail: atos@public.sta.net.cn
|
|