Issue VI - November 2007
Consumers in the Real China
 | Welcome to Retail Matters!
In this issue we capture views on China presented at The Store's Global Retail Forum held in Beijing this Fall. We highlight the challenges brands face expanding in China including multi-national retailers, Chinese retailers, and global FMCG brands. The changing Chinese consumer is also a key focus. We bring you insights reflecting the range of Chinese shoppers, from the lower tier cities to the high-end luxury market.
Please pass this newsletter to your colleagues and forward your thoughts, ideas, and articles for future issues.
Gwen Morrison, The Store
gmorrison@wpp.com |
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Consumers in the Real China
Executive summary from MindShare and Ogilvy
Most research and syndicated data in China focuses on the top 15-20 cities. As competition in these markets heats up, the focus has necessarily shifted to the lower tier. Only 33.5% of retail sales come from the top 24 cities now. The strong purchasing power in low tier markets has become the engine for market expansion. Multinational and local clients are keen to understand consumers and the retail environment in the lower tier, and not much insight has been available.
In mid 2006, Ogilvy Discovery & Mindshare Insights embarked on an ambitious project to unravel consumers, understand their relationship with brands and the media, and study the retail environment in the low tier towns of China. The results from the study should be of immense help to marketers and agencies who want to connect better and sell in the low tier - it would indeed allow them to micromanage their marketing plans. |
Read more about 'Consumers in the real China'...
China Store Visits
By Bryan Gildenberg, MVI
In October 2007, MVI and some of our WPP colleagues went on a tour of Beijing retail, and MVI used the opportunity to think about the Chinese market, including how Wal-Mart and Carrefour, in particular, compete with each other in developing markets.
Read more about 'China store visits'... |
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Best Buy in China
By David Roth, The Store
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Although the Chinese recently welcomed the Year of the Pig, shoppers in Shanghai and other major cities seem to be celebrating the "Year of the Western Retailer."
Last October, Wal-Mart announced an aggressive acceleration of its Chinese expansion acquiring Trust-Mart, a 100-store chain.
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Home Depot recently acquired Chinese HomeMart. H&M plans to enter China this year. And Best Buy just opened its first Chinese store, in Shanghai. The list of western retailers trading in China includes Auchan, B&Q, Carrefour, IKEA, Tesco, Toys R Us, and Zara. These companies are drawn by the size of the Chinese market, with a population of 1.3 billion people, and the rapid expansion of the middle classes and the economy.
David Roth is joining The Store's London office in January 2008 |
Read more about 'Best Buy'...
The Power of Brands
By David Muir, The Channel
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Brand over the years has been subservient to trading within most retailers. However, the retailers that are creating real, substantial, value for their shareholders hold the two as equally important, and accountable.
In 1977 intangible asset value were roughly comparable in value to tangible assets. By 2007 intangible assets are worth three |
| times that of tangibles, reflecting our move to a post-industrial world where intellectual property and services drive the global economy. |
Read more about 'The power of brands'...
Shopping is the Purpose of Life
By Rodney Fitch, Chairman and CEO, Fitch
This presentation explored four propositions: Shopping, by nature of its worldwide economy and size and important role in our social infrastructure is the very purpose of life. Human kind is hard wired to shop. However, retailing by nature of its competitiveness must be ever changing. In the contemporary world, the tectonic plates of world retailing are shifting.
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| That they are is due to many factors; technology, globalisation, emerging markets and new formats etc. But the principle reason arises from the ways successful retailers respond to consumer expectations by mirroring the societies they serve. Above all else, the consumers experience of shopping be it physical instore, or increasingly online, is paramount and the delivery mechanism is through innovation and design. These themes were developed with illustrations from mature (US/European) and emerging (India) markets. |
Read more about 'Shopping is the purpose of life'...
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Recommended Reading
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For Your Diary
Please join us for upcoming WPP Retail Conferences hosted by The Store
 | Digital Innovations in Retail
February 20, 2008
Santa Monica |
| Retailing in India
1st April 2008
Mumbai
3rd April 2008
Gurgaon New Delhi |
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Our Next Issue
Holiday 2007: who were the winners capturing holiday shoppers? Please send your observations for this global report. gmorrison@wpp.com. |
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