From fast food to smartphones, from luxury goods to groceries, the way China shops — and what mainland shoppers want to buy — is changing rapidly. The changes are leaving foreign supermarket and hypermarket chains struggling to keep up by revamping store formats and selling more groceries online, retail analysts say.
On Wednesday Walmart announced a plan to turn round its declining sales in China by boosting store numbers by more than 25 per cent, renovating existing shops and introducing a new online shopping app.
The US chain has been hit by food safety scandals in China, along with rapidly intensifying competition from other big hypermarket chains and from new online grocers.
The sector’s woes are not limited to foreign brands either. A new report by OC&C strategy consultants finds that “nearly all the major players among China’s big-box grocers … have experienced near-consistent negative growth since 2010.” Growth during that period has come almost entirely from new store openings, OC&C said.
Competition from online grocers is one of the biggest threats to brick and mortar sales at chains such as Walmart, Carrefour and Auchan’s SunArt Retail, retail analysts say. Consumer tastes in China change more rapidly than in many established markets, and in the past year or two, online grocery sales have exploded.
OC&C says online sales rose nearly 50 per cent in 2014, year on year, compared with a paltry 6.7 per cent for hypermarkets and supermarket sales (including new store openings). Many consumers are shifting their buying to convenience stores too, retail analyst say, prompting grocers including Walmart and Carrefour to try new, smaller formats for their stores in big cities. (www.chinainout.com)
Walmart already has one of the strongest ecommerce presences in China, through its 51 per cent stake in Yihaodian, the popular online grocer.
No comments:
Post a Comment