Business Planning Analysis-06 Name: Lee Xiantao Branches: Business School, Binhai University Tel:

Chinese supermarkets Contents: (1) The definition of China supermarket (2) The rising of supermarket in China (3) Chinese consumption habits (4) Good teachers of Chinese supermarkets (Wal-Mart vs. Carrefour ) (5) General situation of Chinese supermarket (6) How can we get rid of the trouble?

The definition of China supermarkets The definition: √Convenience store (CVS) : it’s a small retailing shop which is located in common community. Characters as following: Characters as following: ① timely consumption; boutique operation; ① timely consumption; boutique operation; ② square meters ( ㎡ ) ; types of commodity---small number; ② square meters ( ㎡ ) ; types of commodity---small number; ③ variety of services (faxing; printing; booking ticket; printing; express services) ③ variety of services (faxing; printing; booking ticket; printing; express services)

The definition of China supermarkets The definition: √General supermarket : it’s self-serving GMS (General Merchandise Store) focusing on food and other daily products. Characters as following: Characters as following: ① daily and comprehensive (fit for common people; large scale) ① daily and comprehensive (fit for common people; large scale) ② square meters ( ㎡ / /larger than ㎡ ) ② square meters ( ㎡ / /larger than ㎡ ) types of commodity---large number (scale economy) types of commodity---large number (scale economy) ③ purchasing revolution---once a week/ one time for all ③ purchasing revolution---once a week/ one time for all ④ flexible promotion and mature logistics (information management) ④ flexible promotion and mature logistics (information management)

The definition of China supermarkets The definition: √ Big mall : it’s a retailing and wholesale shop for all levels. Generally, big mall focuses on clothes, furniture, and other luxuries. Characters as following: Characters as following: ① daily and comprehensive (fit for common people; boutique operation) ① daily and comprehensive (fit for common people; boutique operation) ② square meters ( /larger than ㎡ ; point-to-point service) ② square meters ( /larger than ㎡ ; point-to-point service) types of commodity---Coexistence (referring to different kinds of commodities) types of commodity---Coexistence (referring to different kinds of commodities) ③ positioning for the middle class and the upper ③ positioning for the middle class and the upper ④ good reputation; large capital; famous brand ④ good reputation; large capital; famous brand ⑤ transformation to GMS (threat from on-line shopping) ⑤ transformation to GMS (threat from on-line shopping)

The definition of China supermarkets The definition: √Exclusive shop: it’s a retailing format that usually focuses some famous brands with franchises and guarantees. Characters as following: Characters as following: ① boutique operation; different positionging ① boutique operation; different positionging ② square meters ( ㎡ ) ; ② square meters ( ㎡ ) ; ③ good reputation and niche market ③ good reputation and niche market

The rising of supermarkets in China ① 1978 introduction stage ---“supermarket” format enter China ---fresh idea ---fresh idea ② growth stage---domestic shops--- action ③ 1992 governments encourage public and private capital enter this field. ---experiment ---experiment Wal-Mart started to establish its bridgeheads. Wal-Mart started to establish its bridgeheads.

The rising of supermarkets in China ④ Vassal contended for hegemony (serious competition) 1995 Carrefour entered China; 1995 Carrefour entered China; 2004 Supermarkets in China are open to foreign capital 2004 Supermarkets in China are open to foreign capital ⑤ A & M (Acquisition and merger)

Chinese consumption habits ① Follow as what others do People would like to imitate others and don’t trust their own judgments. (old people) People would like to imitate others and don’t trust their own judgments. (old people) ② Be sensitive to evaluation from others RI= Respect and Image in disguise RI= Respect and Image in disguise Individual expected Interactive Evaluation from others Keep “RI” Increase “RI” Decrease “RI”

Chinese consumption habits ③ Varying decision-making and social philosophy It’s very hard for some people to make final decision. There are two reasons, which are short of decision-making privilege and value criterion. It’s very hard for some people to make final decision. There are two reasons, which are short of decision-making privilege and value criterion. ④ Easily lured by lower price Discount and promotion are good news for some people, who are likely to take crazy actions in supermarkets. e.g. (Lower price every day in Liqun Group) Discount and promotion are good news for some people, who are likely to take crazy actions in supermarkets. e.g. (Lower price every day in Liqun Group) ⑤ Multi-choice Widening income disparity along with upgrading consumption. Widening income disparity along with upgrading consumption. Hierarchical demand by Maslow Hierarchical demand by Maslow A---B---C---D---E (self-achieving/ respect/ social relationship/ A---B---C---D---E (self-achieving/ respect/ social relationship/ safety/ physiological) safety/ physiological)AB C D E

Economy development Average income YearGDP per capitaGini Coefficient 1980$ $ $ $ $ $ $

Population curve

Population (1)

Chinese consumption habits ⑥ Self-conscious behaviors Reasonable consumers tend to make independent decisions and take suitable actions, not blind. Reasonable consumers tend to make independent decisions and take suitable actions, not blind. ⑦ Blind idea---“the bigger, the better” e.g. famous brand must be the best and the foreign products will be better than the domestic. e.g. famous brand must be the best and the foreign products will be better than the domestic.