CHINA: CHINA'S DOMESTIC SUPERMARKETS ENVISION ALL-OUT WAR AGAINST INTERNATIONAL SHOPPING GIANTS AS THE COUNTRY PREPARES TO ENTER THE WTO THIS WEEK

Record ID: 208432

  • Title: CHINA: CHINA'S DOMESTIC SUPERMARKETS ENVISION ALL-OUT WAR AGAINST INTERNATIONAL SHOPPING GIANTS AS THE COUNTRY PREPARES TO ENTER THE WTO THIS WEEK
  • Date: 3rd December 2001
  • Summary: BEIJING, CHINA (RECENT) (REUTERS - ACCESS ALL) 1. LA STREETSCENE OF BICYCLES, CARS AND CARTS DRIVING OVER HOUHAI LAKE BRIDGE IN HISTORIC CENTRE OF BEIJING 0.08 2. SMALL SHOP OWNER ZHOU YUNHU MOVING A BOX INSIDE SHOP 3. VARIOUS OF ZHOU ARRANGING CIGARETTE PACKS ON SHELF 0.21 4. SV CUSTOMER WITH SMALL CHILD ENTERING SHOP 0.27 5. CU CUSTOMER BUYING PACK OF BISCUITS, HANDING ZHOU MONEY 0.33 6. SMALL CHILD HOLDING BISCUITS 7. CU ASSORTED GOODS SUCH AS CHOCOLATE, BATTERIES, LIGHTERS, ON SHELF 0.44 8. (SOUNDBITE) (Mandarin) ZHOU YUNHU, 22, SMALL SHOP OWNER, SAYING: "The difficulty is that supermarkets have lower prices because they can buy in bulk so people don't come as much to small shops. Small shops also don't have a good selection like supermarkets do." 0.57 9. MV BICYCLES AND CARTS DRIVING IN HISTORIC HOUHAI AREA IN CENTRAL BEIJING 1.03 10. SV ZHOU LOOKING OUT OF WINDOW 1.08 11. PAN ACCROSS INTERIOR OF BEIJING CHAOSHIFA CHAIN STORE 1.15 12. SV SUPERMARKET EMPLOYEE STACKING LETTUCE 1.20 13. CU OLD MAN HOLDING SHOPPING BASKET, LOOKING INTO FROZEN FOOD SECTION 1.25 14. MV WOMAN PUSHING FULL SHOPPING CART 1.31 15. MV CUSTOMERS LINED UP AT CHECKOUT COUNTER 1.35 16. CU SUPERMARKET EMPLOYEE SCANNING BAR CODES OF SHOPPING CART ITEMS 1.40 17. CU CASH REGISTER OPENING, EMPLOYEE PUTTING IN MONEY 1.46 18. MV BEIJING CHAOSHIFA CHAIN STORES GENERAL MANAGER LI YANCHUAN WORKING AT DESK 1.53 19. (SOUNDBITE) (Mandarin) LI YANCHUAN, BEIJING CHAOSHIFA CHAIN STORES GENERAL MANAGER, SAYING: "I'm small, I'm agile, I can move around quickly to dodge your blows. Depending on how I draw out the fight in the long haul, I won't necessarily end up the loser. I will also slowly grow up and mature during this process. After I'm grown, you'll be old and I'll defeat you." 2.10 20. CU FRENCH SUPERMARKET CARREFOUR EMPLOYEE IN BLUE VEST HELPING CUSTOMER WITH ELECTRONICS 2.16 21. WIDE OF CHRISTMAS SECTION OF CARREFOUR SUPERMARKET 2.21 22. CU PILE OF SANTA DOLLS; PAN TO CUSTOMERS LOOKING AT TOYS 2.28 23. MV OLD COUPLE PUSHING SHOPPING CART THROUGH SUPERMARKET 2.35 24. GV EXTERIOR OF CARREFOUR SUPERMARKET WITH CUSTOMER LOADING CAR 2.42 25. (SOUNDBITE) (Mandarin) WANG LI, SHOPPER, SAYING: "Of course there are differences. The environment for shopping in domestic supermarkets isn't good - they're chaotic and the products aren't arranged well, making things hard to find. Also, the level of freshness is terrible - if something has expired, they'll just switch the label and then sell it to you." 2.59 26. GV BUSY SHOPPING STREET WITH MCDONALD RESTEURANT SIGNS 3.05 27. MV PEOPLE WALKING ON STREET 3.10 28. MV SNACK BAR WORKER CHOPPING INGREDIENTS NEXT TO PEPSI "ASK FOR MORE" SIGN 3.14 29. GV SNACK BAR SET INSIDE PEPSI "ASK FOR MORE" SIGN 3.20 Initials Script is copyright Reuters Limited. All rights reserved
  • Embargoed: 18th December 2001 12:00
  • Keywords:
  • Location: BEIJING, CHINA
  • Country: China
  • Reuters ID: LVA18O52JR37EWBXF3GLG2WD0LDL
  • Story Text: As China's gears up to join the World Trade
    Organisation this week, not everyone in the country welcomes
    the new era. China's domestic supermarkets envision all-out
    war against international multi-level shopping giants in the
    country's already crowded retail arena.



    Zhou Yunhu [pronounced joe run-hoo] knows his days
    are numbered.

    He operates a small shop in one of Beijing's oldest
    neighbourhoods but business has dropped off since a
    supermarket opened nearby.

    For him, China's impending entry into the World Trade
    Organisation (WTO) on Tuesday (December 11) is not going to be
    a boon to business.

    In the last few years Zhou has found that the habits of
    his customers have changed.

    While shopping was once a daily routine, many in the busy
    metropolis now only have time to shop only once a week.

    And Zhou can no longer offer Chinese shoppers the bargains
    they are looking for.

    "The difficulty is that supermarkets have lower prices
    because they can buy in bulk so people don't come as much to
    small shops. Small shops also can't have the wide selection
    that supermarkets do," said Zhou.

    Zhou's woes are sure to deepen after China officially
    enters the WTO on Tuesday (December 11).

    Even successful supermarkets like Chaoshifa are worried
    about foreign encroachment once the market restrictions are
    scrapped.

    Chaoshifa [pronounced chow shi fa] Supermarket started in
    the 1980s as a state-owned company selling government rations.

    They had the right connections with the government and
    suppliers to make the conversion into a supermarket chain in
    1994.

    The chain has expanded into 66 stores, most located in
    China's residential areas.

    It is Chaoshifa's location that has been the key to its
    success.

    Its shops mix the convenience of neighbourhood shopping
    with the wide selection that a supermarket offers.

    Though it is the top-ranked chain supermarket in Beijing,
    with sales of 1.5 billion RMB (183 million USD) this year, it
    is readying itself for all-out war.

    Gleaming, multi-level foreign megastores in China such as
    Wal-Mart and Carrefour have already given domestic
    supermarkets a whiff of what the future holds in store.

    Busy car-driving urbanites are flocking to their stores
    and Chaoshifa knows it cannot ride off customer loyalty
    forever.

    Chaoshifa's General Manager Li Yanchuan likens the battle
    to an infant boxing with heavyweight boxer Mike Tyson.

    Though foreign supermarkets might have more capital and
    more sophisticated management, Li hopes his positioning in the
    Chinese market will help him to survive the battle.

    "I'm small, I'm agile, I can move around quickly to dodge
    your blows. Depending on how I draw out the fight in the long
    haul, I won't necessarily end up the loser. I'll also slowly
    grow up and mature during this process. After I'm grown,
    you'll be old and I'll defeat you," said Li.

    Chinese shoppers are drawn to glistening megastores like
    Carrefour, which has upwards of 10,000 square metres (100,000
    sq ft) stocked with bicycles, stereos, clothes, food and
    furniture.

    Since Carrefour opened its first store in Shanghai in
    1996, the French giant has expanded to 28 stores in more than
    15 cities.

    Chains like Carrefour have the deep pockets to ride out
    long loss-making periods.

    They also have the power to buy in greater bulk, meaning
    lower prices for China's cost-conscious shoppers.

    The stores draw in old and young alike who come to load up
    on a week's worth of shopping or just browse the aisles packed
    with an assortment of items.

    Wang Li makes a special trip to Carrefour every week to
    get her shopping done. She prefers the clean, well-stocked
    supermarket to the domestic alternatives.

    "Of course there are differences. The environment for
    shopping in domestic supermarkets isn't good - they're chaotic
    and the products aren't arranged well, so things are hard to
    find. Also, the level of freshness is terrible - if something
    has expired, they'll just switch the label and then sell it to
    you," said shopper Wang Li.

    China's retail market, which had sales of 334.73 billion
    RMB ($40.5 billion) this October, is the second largest in
    Asia behind Japan.

    And domestic supermarkets have begun the pitched battle to
    decide who, in the end, will get knocked out of the ring and
    who will be wearing the winner's belt.


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