I was in Guangzhou at the start of this week and had an opportunity to check out some retail. Competition is as fierce as I have come to expect in China. They also redefine scale. take the shopping mall in the photo. I have captured but part of the mall. Shops are full on every level. And on the lower level – at the bottom of the photo – is a floor of discount items unlike any discount area I have seen in Australia. I’d rather play rugby that get in the way of these shoppers hunting for a bargain.
What surprised me was the number of western businesses, major US and European franchises that have come to China and are operated locally. Take Starbucks … while any milk based coffee sucked because of the milk used, the Starbucks service and retail experience was identical to the US experience. The same was true in 7-Eleven.
Too often in Australia I hear people complaining about Chinese newsagents and that they do not respect the newsagency shingle because it’s not how they are. In China this week and a few weeks ago I have seen excellent examples of Chinese small business people respecting the disciplines of retail brands behind which there are disciplines. This comes back to the point I was making on Tuesday in Why 7-Eleven will beat newsagents, our lack of discipline behind the shingle – Newsagent, Newsagency , N – is our weakness.
I got to see a major book store that had a magazine department the same size as a traditional newsagents. their fixturing was almost the same as what I have seen in larger WH Smith stores in the UK.
Another two take aways from looking at so much retail in China recently are that they are customer service focused and efficient retail business operators. They know that good customer service drives sales ad that business efficiency (including inventory efficiency) drives profits. It all comes back to being good business people. I’m grateful for the opportunity for these and other insights.
Have you visit the 6-level high book supercenter oppsite the shpping center?
That book super center is developed by the state, and state-owned book store take the first 3 levels, and other levels occuppied by indepentent book shops.
It was sad that last year, a famous chinese book store (Sanlian) on level 6 closed down when I visited there. Everything 30% to 80% off and reminder me about the Borders.
The internet book giants and rasing cost are killing the book shops, and local governments are granting independent book shops some tax relief and rent assistance in various Chinese cities.
Sunny I did get there. It was very busy. It’s where I saw the magazine display. Fascinating shop.