As the leading market data and intelligence provider in the APAC region, getchee works with international brand owners that are entering or expanding their operations in China and the rest of the Asia Pacific. We are hosting a seminar in Shanghai on October 29, 2010 at Accenture’s facilities to aid brand owners in their shopping mall targeting strategy. We want to take this opportunity to invite you to attend. Please mark your calendars and stay tuned for details.
China’s rapid urbanization and development rate means new shopping malls are opening every week. Learn how incorporating geo-demographic data and location analysis in your mall selection strategy can maximize your return and create a long term successful store in a flourishing mall.
Avoid shopping mall pitfalls. Bigger is not always better. Dongguan, located in southern China’s Guangdong provice, has a population over 6 million. It is also home to one of the world’s largest malls, New South China Mall. The mall has space for up to 2,350 stores but it’s been 99% vacant since opening in 2005. It’s considered a ‘ghost mall’ or ‘dead mall’.
Click here for pictures if you can’t watch the video.
Register for Seminar – Targeting Good Malls in China
Date: October 29, 2010 (Fri.)
Venue: Accenture Shanghai Office (Accenture link)
Address: 31F Zhao Feng Plaza, 1027 Changning Road, Shanghai, China (map)
Registration: philip.tomlin@getchee.com
Reg. Fee: None
Language: English
Feel free to invite interested third parties.
You always come across GDP when dealing with market potential. But what about ‘retail synergy index’? We feel it is also very important to evaluate and focus on the retail penetration within cities. A city with only a high GDP level doesn’t necessarily mean it’s a good market to enter.
The graph below illustrates how getchee’s retail synergy index adjusts the ranking of Chinese cities based on modern retail penetration. Cities such as Wuhan and Chengdu have modern retail synergies comparable to their GDP rankings, whereas cities like Shenzhen and Guangzhou have retail synergies that don’t quite match their high GDP rankings.
Everyone is talking about emerging markets these days and with all this talk we hear China come up a lot. However, David Rubenstein, a founding managing director of The Carlyle Group has made a good point. “If China, by the year 2035, is the biggest economy in the world, how much longer can you call it an emerging market?”
So, what is a true emerging market? CNN’s Andrew Stevens has recently reported on the growing economic might of Vietnam, particularly Ho Chi Minh. The city is booming and has been booming at an average annual growth rate of 7 percent for the past 10 years. More importantly, Vietnam is serious about drawing in foreign business.
We’ve seen electronics manufacturers like Samsung and Canon, big Asian carmakers as well as Ford, and tanning factories that produce shoes for Timberland all move into Vietnam. Why? It’s cheaper. There’s less state intervention when companies follow workplace and environmental standards. Plus, Vietnam has key access to a vast and cheap labor pool across the borders of Cambodia and Laos, according to Stevens.
But what about retail, particularly retail food? Here are some quick facts about retail food and market potential in Ho Chi Minh compared to its Chinese sister city, Shanghai.
What would the demographic makeup of the first McDonald’s in Ho Chi Minh look like?
McDonald’s trade area with an 1100m large radius would include a labor population of 75,544, a female population of 6,228, a male population of 59,125, and a total population of 124,703.
And Starbucks?
Starbucks trade area with a 900m large radius would include a labor population of 74,283, a female population of 5,985, a male population of 56,460, and a total population of 116,320.
And lucky for us, the trade areas of these two retail giants’ first locations in Vietnam overlap.
So what does a trade area analysis reveal?
Discussion Questions
1. Will we see an emergence of foreign brands such as McDonald’s and Starbucks in Vietnam like we have in China? Why or why not?
2. Where in Vietnam would you open the first McDonald’s?
3. Where in Vietnam would you open the first Starbucks?
We’d love to know what you think. Leave your comments below. Thanks. -Eddie
I had a little trouble finding yogurt in Taiwan when I moved here six years ago. At first instinct, I decided to visit the 7-11 across the street from my apartment. With my broken Chinese, I asked where the yogurt was. The cashier pointed me to the back of the store. I was pretty amazed at all the different teas, juices, and soft drinks but I didn’t find any yogurt. The cashier walked by and pointed to a bottle before continuing to stock the shelves behind me with tons of potato chip bags. A tiny bottle with the word Yakult on it was staring at me. “Okay, I’ll try it,” I said. I paid 8NTD (25cents USD) for it then immediately downed it like a shot of tequila. It was sweet, sour, and tasted nothing like regular yogurt or tequila.
Taipei 101 was also new during this time so I took a look. I was taken aback by all the people and amount of restaurants in the food court. Then I spotted Jason’s supermarket hidden in the back corner. Jason’s prices seemed a bit higher than other supermarkets like Wellcome. I looked around real quick and bought a small package of sushi before I left.
A few years later, a friend told me that he was going to pick up some yogurt. “Yakult at 7?” I asked. He quickly replied and told me he was going to Jason’s. We went over there and he showed me a nice four-pack of yogurt for about 150NT (about 5 bucks USD). Nice!
A couple more years rolled by and I started to notice a few frozen yogurt stores popping up. One of the stores, Yofroyo, belongs to my friend. I tried a cup for about 60NT (around 2USD). And from 2009 till now, I’ve tried a few of his competitors. To be honest, they’re all decently tasty but what I really noticed was that business is pretty good. I think we’ll continue to see decent growth in yogurt sales in Taiwan as consumers are becoming more health conscious. Stay tuned for more info on healthy food products in Taiwan.
Want to know about the yogurt market in Dalian, China? Let me know. Thanks. -Eddie
Hypermarkets are a retail store format that has taken China by storm. They’ve given mom and pop shops, convenience stores, and supermarkets a run for their money. Moreover, foreign hypermarkets have grabbed the bull by the horns and fiercely planted their feet in the market.
We saw a nice spurt of growth during the mid-1990s. Then Tesco entered the market in 2004, expanding rapidly with 82 locations in just 6 years. However, many first and second tier cities in China have become saturated with hypermarkets. Will we see similar growth and expansion in lower tier cities over the next ten years?
Additional Questions
1. Will newer players in the market like Jusco be able to compete?
2. What retail store formats will give hypermarkets a challenge?
China’s rapid urbanization and development rate means new shopping malls are opening every week. Learn how incorporating geo-demographic data and location analysis in your mall selection strategy can maximize your return and create a long term successful store in a flourishing mall.
