Ute Holtmann, EHI Retail Institute, reports on her retail experiences in China
Alarm at over 6 percent! And indeed, compared to the double-digit rates in the years prior to 2016, this marks a somewhat restraint growth.
Having said that, in relation to the German market, this percentage rate is still downright heavenly, noted Kurt Jox, Managing Director of furniture retailer Porta, at the C-star Retail Conference in May. That’s why people should by no means be influenced by the negative headlines of the gutter press that almost has a panic attack about the slowing growth rate.
The new joy of consumption
China is home to approximately 1.5 billion people, of which more than half reside in gigantic cities by our standards. The Chinese government viewed urbanization as an important factor of economic growth. And now China’s city dwellers actually want to consume! For too long, only very few people were able to indulge in the joys of consumption thanks to China’s uniform policy regime. The Chinese love to shop – at brick-and-mortar stores, online and a good deal by mobile shopping. In 2015, China was already the world’s largest e-commerce market. Just in the last quarter of 2015 alone, Chinese consumers used their mobile phones to buy goods worth more than 80 billion dollars.
Of frogs and fish
Let’s start with Carrefour, a grocery retailer that has operated 236 hypermarkets since its China market entry in 1994 and boasting annual net sales of € 4.9 billion. Seven days a week, Chinese consumers are especially drawn to the large selection of imported products and the fresh produce section with 15,000 square meters of sales floor space.
Live fish are fished from fish tanks and carried out the store by customers in plastic bags filled with water. Some fish also manage to jump out of the tanks on their own. But they are still not able to escape their inevitable fate. Frogs, turtles and many other unusual animals- based on European taste buds- are on the Chinese menu and are a part of the essential product selection of available live food products at Carrefour.
In general, things are very animated at the fish and meat departments here. Satisfying the desire for fresh foods, many animals or animal parts are dissected right in front of the customers. Sales associates prepare Chinese delicacies at various stations and while the cooking fumes somewhat obscure your view, exotic smells whet your appetite.
Trust is good but control is better
To Europeans, the Chinese need to closely examine products before buying them seems somewhat unusual. That’s why products in the fresh food section are openly presented and don’t just have to measure up to the scrutiny of prospective buyers – as is the custom in our region. For example, before the Chinese purchase fresh unpackaged meat, they touch and check the items in great detail. That’s why meat counters at Carrefour cannot be compared to counters in Germany: whether it is pigs or chicken feet, everything is available in an open display case; customers take out the piece that has passed their inspection and wrap it into plastic bags.
I was truly impressed by one special service of the grocery store. Since many Chinese people are not mobile like we are accustomed to in Germany, Carrefour offers its customers a free shuttle service.
By the way, some media are also optimistic. Manager Magazin recently featured an article titled ‘Chinas Wachstum kriegt die Kurve‘ (English: China’s economic growth turns a corner).
Author: Ute Holtmann, EHI Retail Institute in September 2016