China Herald: Making money in groceries is tough

Paul French

Supermarkets in China might have taken over the groceries in the US in size, but making money is so much harder, explains retail analyst Paul French in CRI.

CRI:

While the potential is vast, China's grocery market is a fickle and fragmented landscape where domestic chains compete fiercely with Western brands for a share of a low margin market.

"It is much more competitive than in the US or Europe. It is incredibly hard to make money," said Paul French, chief China analyst at Mintel. "People are very price conscious and do not spend on the variety of goods that they do in the West. They are terrible for loyalty - it's been a massive problem for supermarkets in the past."

While Carrefour, which was swift to adapt to Chinese tastes with live fish and rice cookers, is widely regarded as having had the greatest success in China; "they got here first, and fastest" Mr French said - Tesco is expanding rapidly and is on track to grow the fastest globally in the next four years, according to IGD.

Western supermarkets have been experimenting with different strategies in a bid to win in China, which is forecast to have more than 200 cities with a population of more than a million people by 2025; a population increase equivalent to the whole of America.

More in CRI.

Paul French is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.