El desarrollo de los supermercados en China

8/3/2019 El desarrollo de los supermercados en China

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InterChinaInsight

CorneringChinasMarket

TheBattleoftheSupermarketChains

ByJamesSinclair | August25,2011

InterChinaConsulting

Beijing

ShanghaiMadridMilan

WashingtonDC

ManagementConsultantswww.InterChinaConsulting.com

@2011ChinaConsultingAllRightsReserved


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InterChinaInsight

www.InterChinaConsulting.com

2011InterChinaConsulting.AllRightsReserved


August 25, 2011

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ExpansionofInternationalChainsTakeawalkaroundoneofBeijingsneighborhoods,andyouremorethanlikelytoseeaWalMartanda

Carrefour,

as

well

as

many

other

hypermarket

and

supermarketchainsfromaroundtheworld. Most of the worlds leading hypermarket andsupermarket chains are in China. For WalMart,

CarrefourandTesco,thethreeglobalgiants,Chinais

nowtheirfastestgrowingmarketworldwide.Indeed, firsttier cities are fast reaching saturation,

with fierce competition between stores and little

roomleftfornewcomers.Sotheinternationalchains

arenow turning toChinasdozens, ifnothundreds,

of smaller cities, tapping the consumption growth

thatsemergingacrossthecountry.

WalMarthasdevelopedthelargestfootprintofthe

three.By theendof2010 ithad219stores inover

100 cities generating revenues of RMB 40 billion

(USD6.2billion).Carrefourhad182storesandRMB

42billion (USD6.5billion) in revenues,whileTesco

had109storesandRMB16billion (USD2.4billion)

inrevenues.

Yetthisexpansionisexposingnewchallenges.China

hashundredsoflocalhypermarketandsupermarket

chains, each with their own territorial stronghold,

andmanywithaggressivegrowthambitions. WhileChinaonlyaccountsforasmallshareoftheir

global revenues at present,with the highest being

Carrefourat5%,thiswillchange.Togetherthethree

globalgiantsadded100newstoresin2010,andthis

expansionwill continuewell into the future. Tesco

plans toopenmorefloorspace inChina inthenext

five years than it has done in eight decades in its

homecountry,theUnitedKingdom.

As this battle between the international and local

chainsplaysout, thehypermarketandsupermarket

sectorwillbesignificantlytransformed.ManyFMCG

companies are wondering whether todays

frontrunnerswillbetheonesleftstandingwhenthe

dusteventuallysettles.

China Footprints of the Global Giants

Carrefour Stores

Tesco StoresWal-Mart Supercenters

Source: Company Websites, InterChina Analysis (Sept. 2010)


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Inadditiontotheglobalgiants,therearemanyother

internationalchainsalsointhechase.AmongChinas

top

20

FMCG

retailers

are

Auchan

from

France,

MetrofromGermany,LotteMartfromSouthKorea,

Lotus from Thailand, as well as TrustMart and

RTMartoriginallyfromTaiwan.

CompetitionPosedByLocalChains

It was only three decades ago that Chinas retail

sectorstartedtoemergefromtheplannedeconomy

(seebox:FromASellersToABuyersMarket).Yet

whilehypermarketandsupermarketconceptswere

then introduced to China from theWest, it is the

localchains

that

now

dominate.

They

account

for

around 80of the top 100 FMCG retailers inChina,

andthetwolargestchainsareChinese:CRVanguard

andLianhuaSupermarket.

CRVanguardgenerated revenuesofRMB72billion

(USD11.0billion) in2010, almost twice the sizeof

either WalMart or Carrefour. Many of its 3,155

stores are smaller format, but of the 450 stores it

opened last year, 60 were large supermarkets. It

planstoopenafurther70to80largesupermarkets

this

year.

Similar to CR Vanguard, Lianhua Supermarkets

revenueswereRMB 70billion (USD 10.8billion) in

2010.Ofits5,239stores,143arehypermarketsand

3,014 supermarkets, with the hypermarkets

contributing RMB 16.1 (USD 2.5 billion). While

Lianhua Supermarket has been rationalizing its

footprint, it still opened 550 new stores last year,

including12hypermarketsand320supermarkets.

LocalRetailInnovation

International chains are bringing best practices to

China,andcontinueto leadthewaywhen itcomes

to retail disciplines such as category and shelf

management, shopper marketing and loyalty

programs, and joint value creation with suppliers.

Nevertheless, local chains are fast scaling the

learningcurveandbecomingmoresophisticated.

Chinas Top 20 FMCG Retailers (2010)

International

Local

10.8

11.0

1.7

1.7

1.8

1.8

1.9

2.12.1

2.4

2.5

2.5

2.7

4.3

5.8

6.2

6.5

7.7

1.9

1.9

12

8

13

1516

22

18

375

20

56

0

1

4

15

18

15

244Lianhua

CR Vanguard

Carrefour

6

38

-3

11

14

20

11

7

117

-4

7

0

3

-4

11

25

17

18

-6

83,155

5,239

143

182

219

2,578

3,204

112

104

286

109

7441

70

524

154108

48

592

239

Source: China Chain Store & Franchise Association

Wuhan Zhon bai

Beijing Jingkelong

Shandong Jiajiayue

METRO

Jiangsu LOTTE

Tesco

Yonghui

Trust-Mart

A. Best

Wumart

Wal-Mart

AuchanLotus

RT-Mart

NGS

Number ofStores

YOY SalesIncrease (%)

YOY StoreIncrease (%)

Revenues(USD Billion)

Renrenle

Zibo Newstar


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FromaSellerstoaBuyersMarket

PlannedEconomy

Era

Lookingback30years,Chinawasonlyjustemergingfromtheplannedeconomy.Itsretailsectorwasstrictly

regulated,commoditieswerescarceandarationsystemwasstillinplace.

Couponswereissuednotonlyforfoodandfuel,butalsoforbikesandtelevisions.Eachcouponspecifiedan

item,quantityandsometimesretailoutletaswell.Meat inparticularwas inshortsupply,rationedat0.25

kilogram per person permonth, andmany Chinese had to eat vegetarian diets. Regardless of financial

wealth,withoutcouponsChinesepeoplesimplycouldntpurchasegoods.

Retailwasdominatedbystateandcollectivelyownedstores,andwhileafewfreemarketscontinuedtoexist

in thecountryside, theywereconsidered the tailofcapitalism tobecutoffsooneror later.The levelof

protection

afforded

to

retailers,

and

lack

of

competition

between

them,

resulted

in

poor

performance

and

consumerservice.Nonewretailformatsorserviceinnovationshadbeenintroducedfordecades.

Duetothescarcityofproductsandtheplannedpricesystem,itwasthesuppliersthatreallyhadtheupper

hand.Although they couldnot raiseprices, they could choosewhetherornot to supply,and specify the

volumestheywouldsupply.Itwasnotuncommonforretailbuyerstousebackdoorrelationshipstogethold

ofmuchwantedgoods.

ReformandOpening

Withpolicyrelaxationoverthepast30years,thetransformationoftheretailsectorhasbeendramatic.

Itbeganinthe1980swiththebreakingofthestrangleholdofthestateandcollectivelyownedstores,leading

toan

influx

of

individual

retailers

and

reopening

of

the

free

markets.

Meanwhile,

the

government

took

steps

toabolishtheprocurementandsalessystem,andreducethenumberofconsumergoodssubjecttoplanned

prices.

Moving intotheearly1990s, internationalretailchainsbegantoenterChina,bringingnewretailconcepts

andmanagementknowhowwiththem.Carrefourwasoneofthefirst,enteringtheyearthatinternational

participation inChinas retail sectorwas granted encouraged status, and thenumberhas grown steadily

since then. ChinasWTO commitments,which gradually lifted the remaining restrictions on international

retailers,attractedfurthernewcomersfromthemid2000sonwards.

Astheretailsectorhasgrown,Chinahasflippedfromasellerstoabuyersmarket.Fromhavingnexttono

choice,consumersarenowspoiltforchoice,bothintermsofwhattobuyandwheretobuy.

RetailInnovation

Chinasretailtransformationstillhasa longwaytogo. Itwillno longerbedrivenbyderegulationasinthe

past, but by the growth of consumption and competition between retailers, especially organized retail

chains.

Retailers now have to strive to better understand consumers and satisfy their needs, and thuswe are

startingtoseemanyoftheworldsbestpracticesbeingadoptedinChina.

ThatdoesntmeantosaythatChinasretailsectorhaslostitsdistinctcharacteristics.Indeed,beforelongwe

expecttoseecasesofChinaleadingtheworldinretailinnovation.


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Oneof themost forward looking isBeijingHualian,

juston the fringeofChinas top20FMCG retailers

with

2010

revenues

of

RMB

10.3

billion

(USD

1.6

billion)and110 stores. It is seeking todifferentiate

itself against its international and local peers by

developing a deeper understanding of the Chinese

shopper,andusing thatunderstanding toprovidea

bettershoppingexperience.

To meet this objective, Beijing Hualian has

establishedwhatisclaimedtobetheworldslargest

retail innovation center, opened in Beijing inMay

2010.Thecenterisnowcollaboratingwithprincipals

andsuppliers,conductingshopperbaseddesign,and

using its fullscale supermarket laboratory to test

newconcepts.P&Gsformerglobaldirectorofretailinnovationwasbroughtonboardtoheadthecenter.

The first results are helping Beijing Hualian move

upmarket in firsttier cities. Given the growing

stratification of consumer segments, and the need

foraricherrangeofretailconcepts,BeijingHualian

has launched a highend supermarket brand: BHG

Market Place. These stores, together with those

under Blt and Ole banners of CR Vanguard, offer

someofChinasbestsupermarketshoppinginterms

ofenvironmentandmerchandising.

RTMartsSuccessStory

While the stronger local chains are moving

upmarket in the bigger cities, the international

chainsareheadingoutintothesmallercities.Oneof

the most successful has been RTMart, the joint

venturebetweenTaiwanbasedRuentexGroupand

theAuchanGroupfromFrance.

RTMart entered China in 1997, a few years after

Carrefour, with a wellconceived approach. It

pursuedapricing

strategy

that

attracted

value

driven shoppers, developed balanced relationships

with its suppliers, and offered an employee

proposition that increased retention. Meanwhile,

instead of concentrating on the bigger cities,

RTMartsecuredprimesitesinthesmallercities.

The result:RTMartrecentlysurpassedCarrefour to

becomethelargestinternationalchaininChina,with

2010

revenues

of

RMB

50.2

billion

(USD

7.7

billion)

generatedfromits143stores.Moreimportantly,its

averagesalesperstorewereRMB351million (USD

54million), farsurpassing thoseof the threeglobal

giants.

TerritorialStrongholds

RTMart aside, it is generally thehundreds of local

chains thatare strongest in the smaller cities.They

are a mix of regional, provincial and municipal

players, eachwith their own territorial stronghold.

This

is

true

even

for

the

largest

local

chains,

such

as

CR Vanguard and Lianhua Supermarket. Indeed,

Lianhua Supermarket stillhas86%of its5,000odd

storesinEastChina.

As the international chains penetrate the smaller

cities,theyarecomingupagainstthese localchains

and their strongholds. Firstly, they have benefited

from being early movers, and securing the prime

locations. Secondly, their concentrated footprints

make for efficiencies in terms of management,

marketing and supply chain. Thirdly, they have a

betterunderstandingofthe localbrandpreferences

andshoppingbehaviorwhere theyoperate.Thisall

addsuptoposestiffcompetition.

Someofthestiffestisposedbytheprovincialchains

that aspire to become regional players. There is

YonghuiSuperstores,withRMB16.0billion(USD2.5

billion)inrevenuesgeneratedfrom286stores,anda

major player in Fujian Province. Wuhan Zhongbai

Supermarket,withRMB12.2billion(USD1.9billion)

in revenues generated from 154 stores, is a strong

force inHubeiProvince.AndBetter Life,withRMB

7.6 billion (USD 1.2 billion) in revenues generated

from105

stores,

is

abig

name

in

Hunan

Province.

Following in their footsteps are many municipal

chains that have their sites set on becoming

provincialplayers.


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A Modern Supermarket In Funan(a typical fifth-tier city in Anhui Province)

IGAs members are increasingly being regarded as

important partners for international FMCG

companieswhen itcomes tosmallercities inChina.

Not only are they a channel to improve the

availability of their products, but also a source of

retail data to improve their understanding of local

consumers.Assuch,weexpecttheIGAtobeaforce

intheshapingofChinasretailenvironmentoverthe

comingdecade.

SupportoftheIGA

Asthemunicipalchainsaspiretobecomeprovincial,

and the provincial chains regional, they will need

outside support to become more sophisticated. A

newsourceofglobalexpertisehasarrived inChina

todojustthat.TheIndependentGroceryAssociation

(IGA), a USbased association of regional

hypermarket and supermarket chains, recently

established a chapter in China. It has 20members

operating2,500storessofar,and isalreadyhelping

tomake

adifference.

AcquisitionsAhead

Anotherforcewillbeconsolidation.IntheWest,the

trendisforbigboxretailerstobesituatedonurban

perimeters in sprawling single story buildings

surrounded by huge parking lots. In contrast, the

best sites in China tend to be in dense residential

neighborhoodsormultipurpose complexes, spliton

multiple levelswithbasementparking.Clearlythere

are a finite number of these sites with few left

unoccupied.

Ithasjoined theUniversityOfWuhan to found the

IGA Instituteandtrainitsmembersinmodernretail

managementdisciplines.Itisestablishingdirectlinks

between itsmembersand their suppliers toenable

joint value creation programs, such as drawing on

supplier expertise to run better instoremarketing

programs. And it has begun using the combined

scaleofitsmemberstogenerategreaternegotiation

power over suppliers than individual chainswould

havealone.


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improve same store sales while limiting upwards

costpressuresinordertoprotecttheirmargins.

Sowhileboththe internationaland localchainsare

fullof ambition,and there are anumberof strong

frontrunners,themarketisfarfrombeingcornered.

Note:Adaptedfrom a set of articles that originallyappearedintheChinaDaily.

Contributedby

JamesA.C.Sinclair,

ManagingPartner,


James A.C. Sinclair is a Managing Partner with

InterChina. He advises international companies on

market development and market penetration

strategies in China, and is currently the leader of

InterChinasConsumer&RetailSectorGroup.Hehas

livedandworkedinChinaforthepast14years.

[email protected]
mailto:[email protected]:[email protected]:[email protected]


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Specialistin

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Wewere founded in1994,and throughourunique

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Our team of 50 professionals has conducted over

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We pride ourselves on being practical, developing

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El desarrollo de los supermercados en China

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