Karl Lai

Solutions Manager

September 11, 2017

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Case Study – Uniqlo Expansion Path Review, 2013-2017

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The fast fashion industry in China has grown rapidly for last decade, yet now slows pace down. Taking a look at recent trends in the number of Uniqlo stores from 2013 to 2017, we found out that there was an expansion speed peak in 2015. In this research we try to track changes of Uniqlo store growth within recent four years. The figures reported here are based on store counts of every two year.

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Sherry Shi

Project Specialist

March 2, 2015

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General Schema of Retail Site Location Assessment_part 2

Site Analysis at the Micro-Scale

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Fig.  Classification of assessment location explanatory variables

 

Previously we have talked about what elements to look at when evaluating a retail site in a macro perspective.  (Click to read more) Now we will formulate a location strategy of prospective sites into micro analysis.

 Micro Problem

Micro problem is the other main component of assessing a site location. Retailers have always understood location as paramount, but understanding all aspects of store performance, site potential in addition to consumer behavior demands a great amount of information. This involves an understanding of the geographical, demographic, socioeconomic, and competition data in the area. The figure above suggests a possible classification of assessment location explanatory variables. In opposition to trade zone evaluation (demand and competition), the site and store variables intend to evaluate internal factors or the new store offerings.

The retail sector is going through a restructuring phase, driven by factors such as increasing consumer mobility, increasing electronic commerce, changing household size, concentration of market power, market saturation, and changes in planning legislation. These changes require retail groups to invest strongly in stores of smaller dimension while focusing on a strategy that prioritizes proximity to the target customer and quality of goods and services. This investment has a long – run as well as smaller economies of scale, which forces careful decision-making.

 

 Also worth reading:
General Schema of Retail Site Location Assessment_part 1 (Decision-Making In A Macro Perspective)

April Wu

China Market Strategy

February 6, 2015

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Top 20 Cities For Business In China

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Forbes China has announced a ranking of best cities for business in China. Business development has expanded to tier2, tier 3 cities in addition to Beijing, Shanghai, and Guangzhou. Below are the top 20 cities.

 

top business cities in china

 

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From the outward growth of business focus we can find that either local or foreign enterprises have altered their network planning. How brand owners to prioritize their city expansion strategy in terms of business requirements is crucial to the future success of the firms. Benchmark your brand to competitors and prioritize cities with most potential to help you develop best market plan.

Sherry Shi

Project Specialist

February 5, 2015

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General Schema of Retail Site Location Assessment_part 1

Decision-Making In A Macro Perspective

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Crucial aspects for the success of smaller retail stores include location, dimension, services offered, and the targeting of specific market segments. Here we consider a phased decision methodology where we separate decisions about choosing geographic regions from choosing store locations within the region.

Macro Problem

In the first phase, define the Macro Problem based on: strategic policy for a network, zone, or region where new stores will be installed; the number of units to be built; along with implementation timing.

In the second phase, make the final store-site choice by narrowing down a selection of available locations, usually with the help of real estate agencies. For this decision level, the number of commercial and academically published models suggests that researchers feel a need for rational and formal use of information.

The third decision level, concerning store and services design is the level most linked to the concept of service quality and customer satisfaction. Focus on models that take into account store location (level 2) and the physical design of the facility. Furthermore, some application can be extended in the store characteristics and services definition (level 3).

Tab.  Decision levels involved in the expansion strategy of a retail network

table

 

Also worth reading:
General Schema of Retail Site Location Assessment_part 2 (Site Analysis at the Micro-Scale)

Weiwei Lai

Business Analyst

January 23, 2015

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Tesco completes CRE joint venture in China

Store network optimization is next big thing

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China Resources Enterprise (CRE) has finalized acquisition with Tesco to create the largest food retailer in China by the end of May, 2014. The joint venture will combine Tesco’s 135 outlets in the country with CRE’s almost 1,000 stores, called Vanguard. Vanguard owns various business types such as hyper-marts, convenience stores, supermarkets and others. Among these outlets there are more than 250 hyper-marts. It is crucial for CRE to effectively carry out integration and store optimization plan after the acquisition.

original news >>


getchee Insights

To better execute store network optimization, brand owners need to fully understand market potential and penetration of targeted city. Reviewing performance of current stores and comparing actual performances against potential’s to get a clear picture.

Steps of SNO (Store Network Optimization)

  • Scorecard: to assess each branch and analyze competitor distribution
  • Cannibalization analysis
  • Channel optimization: overall planning of current stores (keep, improve, move or close)
  • Market expansion: site selection of new stores in terms of untapped high potential areas

 

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