Metro man takes on mass market
Uwe Hoelzer has ambitious plans to attract more buyers from small and medium-sized companies and to expand
province, on Wednesday.
Metro China’s sales revenue totaled 1.5 billion euros ($1.84 billion) last year, an increase of 18 percent from 2010.
For the company, it was an extremely good year. However, compared with locally developed wholesale markets, the sales performance was not that outstanding.
For instance, Shanghai Jiangyang Agriculture Products Trading Market, one of the largest wholesale markets in Shanghai’s Baoshan district, reported 3.75 billion yuan ($589 million) in sales revenue in 2007. In addition, China Commodity City in Yiwu, Zhejiang province, one of the largest small commodity wholesale markets in China, generated 50 billion yuan in sales revenue last year, 12 percent higher than the figure in 2010.
According to data from China Chain Store & Franchise Association, Metro China ranked a distant 38th among the top 100 chain store operators in China in 2011 in terms of sales volume.
As a chain wholesale operator with a different business model, Metro China’s store opening speed is much slower than some large international rivals such as US-based Walmart Stores Inc (branded as Walmart since 2008) and France-based Carrefour SA. By the end of 2011, Walmart had opened 267 stores in China and Carrefour had 203 around the country. Carrefour reported 42 billion yuan in sales revenue in China in 2010.
However, Metro remains positive about the Chinese market. It estimated that the nation’s wholesale market size is worth roughly 4 trillion yuan, which provides tremendous business opportunities for the company.
However, slow speed in expansion may not mean something bad for Metro China from Hoelzer’s perspective, especially for a foreign company that might not be familiar with the Chinese market at this early stage.
Learning by trial and error is a strategy taken by many foreign companies, including Sweden-based Ikea, which said it would undergo rapid expansion from 2011.
“On the other hand, sometimes, it is better to go for less speed and more quality, instead of being too fast or doing something that is perhaps not successful at the end of the day. What I want to say is, we have a business model which is well-developed now,” said Hoelzer.
Metro will open seven to 10 stores this year and similar numbers annually in the years to come.
“My target to open seven to 10 stores is already a big challenge because first of all, we have to find the right store location,” said Hoelzer. “You lose money immediately if you make a mistake in choosing a new store location.”
Before coming to China, Hoelzer was the chief executive officer of Metro in Vietnam and then in Poland. His experiences in those two countries make him quite confident about the company’s performance in China.
He said there is competition in China, but it is not comparable with some foreign countries.
According to Hoelzer, in European cities each with 40,000 to 50,000 residents, normally there will be four to five hypermarkets, which leads to intense competition among rivals.
“And here (in China), we are still far away from having similar high competition as in western Europe or eastern Europe,” said Hoelzer. “I always tell our store managers: ‘Look, there is competition but it is not yet comparable to what we know from other countries’. ”
Currently, Hoelzer seems quite confident and ready to deal with the complex market situation in China.
Engaged in the retailing and wholesale sector since he graduated from university, Hoelzer said being the president of Metro China is his greatest achievement. He started his career in a retail company and became one of the youngest managing directors at Aldi when he was 30. Aldi is a Germany-based supermarket chain operator specializing in inexpensive goods.
Hoelzer said it was a coincidence he entered retailing. “My grandma was shocked when I told her I would start my career life with a retailing company. My whole family was working in the legal arena. She wanted to see me as a state attorney or as a lawyer working in the retailing industry,” said Hoelzer. “She was quite impressed after she saw I became successful in my career life.
“I wrote my thesis about key account management. The key account management approach was founded in the fast-moving consumer goods sector. For me, it is interesting to work on this topic. And it was the reason I applied for a job with one of the big German retail companies.” Q: How do you spend your weekend? A: The weekend is wholly and exclusively for the family. For me, to keep the weekend in its entirety means no work and spending more time with my family. Family gives you the strongest backing. You should find the right balance between life and work, especially when you have a family as you go around the world. It is my responsibility to take care of the family. What are your hobbies?
Good food, wines and sports — skiing, scuba diving. What is the saying that you like the most?
Treat others in the same way you want to be treated. This is what I learnt from my first boss when I started work. Who is your icon?
I do not have an icon. Clearly, there are people who do an outstanding job. For me, my parents, especially my father, is an important person with regard to my business life. What is the book you are reading now?
Steve Jobs’ biographies in general. Steve Jobs was an impressive person but he is not my icon.
I learned the whole story behind the company but did not learn for my personal behavior, and not the way I manage something.
Biography reading is important and interesting. What is your idea of perfect happiness?
A happy, healthy family life. What is your most treasured possession?
My dog. We thought about having a dog for 30 years. I discussed this with my parents and they always said “no” because we travel a lot. Then I suddenly saw this dog in a pet shop in Shanghai. I loved this dog and then she became part of the family. What kind of experience has shaped your thoughts the most?
When my son said I missed his first school day because I had a business meeting. As an ambitious young manager, I was always career-orientated and spent most of my time focusing on business. Suddenly my son told me I missed all important school-day events. I did not try to explain. I tried to change myself. There is no excuse and I cannot apologize.
So when there are important events or even less important events, I go with my family.