In China, Wal-Mart meets its match: Sun Art Re­tail Group

China Daily (Canada) - - BUSINESS - By AS­SO­CI­ATED PRESS

At the store in Shang­hai, signs pro­mote “ev­ery­day low prices”, along with tem­po­rary pro­mo­tions — just like Wal­Mart Store Inc does.

But this isn’t an out­post of the world’s largest re­tailer. It’s an RT-Mart, a branch of a chain that is do­ing bet­ter in China thanWal-Mart.

Wal-Mart ranks No 3 in mar­ket share in the big store sec­tor and faces stiff com­pe­ti­tion from lo­cal and re­gional play­ers like the No 2 that is Sun Art Re­tail Group, RT-Mart’s par­ent.

Th­ese ri­vals have copied Wal-Mart’s ways, but also rely on what they said is their bet­ter knowl­edge of the Chi­nese shop­per. RT-Mart and other ri­vals seem to have poached Wal-Mart’s “ev­ery­day low price” slo­gan — though they last just a few weeks, in­stead of prices that re­main low for months. Their tac­tics have mud­died Wal-Mart’s mes­sage and forced the United States re­tailer to find an­other slo­gan, “Worry Free”.

Sun Art, a French-Tai­wanese joint ven­ture that also op­er­ates stores un­der the ban­ner Auchan, has fewer stores in China than Wal­Mart has. But it boasts it’s al­most ev­ery­where in the coun­try.

In a re­cent phone in­ter­view, Bruno Mercier, CEO of Sun Art Re­tail Group, talked to The As­so­ci­ated Press about the cau­tious Chi­nese con­sumer, how his com­pany stands out from Wal-Mart, and the future of the su­per­sized stores as the Chi­nese rapidly move on­line.

How has the slower eco­nomic growth af­fected the Chi­nese con­sumer?

We see quite a bit of focus by con­sumers on deals. When­ever we do a very strong pro­mo­tion, we can see a good con­sumer re­sponse. Sales on a day-to-day ba­sis may be tepid. When­ever we push a but­ton, and we do some­thing strong, wecan see the con­sumer come back.

How have food scares af­fected shop­pers’ be­hav­ior?

There is a great deal of cau­tion by the con­sumer in terms of food qual­ity. We are try­ing to deal with that by be­ing a safe food provider.

I cross my fin­gers. We haven’t had any re­ally bad things at the stores. On the whole, the sit­u­a­tion has been pretty good. But we are putting quite a bit of ef­fort (into food safety).

The move to im­ported food has been re­ally driven by the food scares. For bet­ter or worse, the Chi­nese con­sumer is very skep­ti­cal about food pro­duc­tion in China. We’re just re­spond­ing to that need by en­larg­ing our shelf space that we de­vote to im­ported items.

Did you copy Wal-Mart do­ing ev­ery­day low price? in

No. Ev­ery­body is try­ing to find what works bet­ter in the eyes of the con­sumer. There­fore, there’s an in­creased level of ac­tiv­ity in terms of what can be done with pro­mo­tions in China.

How are you dif­fer­ent from your com­peti­tors?

There's no sin­gle item that makes us dif­fer­ent. Ev­ery­body is copy­ing ev­ery­body. Over­all, lo­ca­tion is very im­por­tant. We’ve been in the best lo­ca­tions for a num­ber of years. As a re­sult, we’ve been clos­ing less stores than the com­pe­ti­tion.

You don’t want to be only in the base­ment floors. We are also one of the re­tail­ers that have the largest park­ing spa­ces. In this coun­try, car own­er­ship is in­creas­ing. We are also able to of­fer a range of prod­ucts that are very suited to the lo­cal tastes of the con­sumers.

We have a na­tion­wide foot­print, but ev­ery­where we are, we want to have the prod­ucts that are known by con­sumers in each area. We have large scale, there­fore we can drive rea­son­ably good bar­gains with our sup­pli­ers.

Given the rise of on­line shopping, what’s the future of the big store? Are you ner­vous?

It is our job to be ner­vous about what­ever hap­pens. We need to find an­other way to re­spond to the con­sumer. We are ex­per­i­ment­ing with other for­mats. Of course, home de­liv­ery by our e-com­merce is an­other op­tion. We’ve been moving some ap­pli­ances (from the store) on­line.

We have a na­tion­wide foot­print, but ev­ery­where we are, we want to ... be known by con­sumers in each area.”

What about open­ing con­ve­nience stores?

We haven’t opened con­ve­nience stores. The prob­lem with con­ve­nience stores is that so far in China, many of the play­ers are los­ing money. Do­mes­tic play­ers have the ad­van­tage of be­ing able to sell cig­a­rettes, which are con­tribut­ing in­creas­ingly to the prof­itabil­ity of their stores.

See more by scan­ning the code.

Newspapers in English

Newspapers from China

© PressReader. All rights reserved.