Title: Understanding the ‘retail revolution’ in urban China: a survey of retail formats in Beijing
Abstract: Abstract Retailing in Chinese cities has experienced rapid changes in the reform era. One of the most visible changes in the urban retail landscape has been the emergence and growth of new retail formats. Using Beijing as a case study, this paper examines the evolution of retail formats in Chinese cities. The paper investigates the impacts of the changing external environment, especially the shift in government policies, on the structure of retail formats. It argues that to understand the rapid restructuring of retail formats in Chinese cities one needs to take into account the factors such as political, economic and social-cultural environment, and perhaps more importantly, regulatory changes. The consequences and implications of observed retail changes are discussed. Keywords: retailingretail formaturban ChinareformBeijingPEST analysisregulation Acknowledgements The author would like to thank Kam Wing Chan, William B. Beyers, anonymous reviewers, and the editor for their helpful comments and suggestions. All errors remain the responsibility of the author. Notes Until the mid-1980s, most retail shops in Beijing were general goods stores (including some department stores), small grocery stores, and mom-and-pop shops. Retail concepts like 'supermarket', 'hypermarket', 'convenience store', and 'warehouse store' were unknown to most urban consumers. In the 1990s, retail businesses of various new formats emerged and began to grow quickly. Author's calculation is based on the data and information from Beijing Social Sciences Institute (Citation1983) and BSB (Citation1983 [2003–2007]). In 1993, the Beijing government announced the plan of building or redeveloping 100 large department stores with a floor space of 10,000 m2 or more by the year 2000. Although not all investors were blind followers, this plan played a role in directing the flow of retail capital: more state investment in retailing would be directed to the development of large department stores, and attracted by the 'promising' environment, non-state investors would also like to invest in such projects, and they were more easily approved. Born in France in the early 1960s and spread quickly to other Western European countries (and the North America as well where it is also called 'supercenters'), the hypermarket was a classic retail innovation, combining price competition with convenience of a varied product range (Brown, Citation1987a; Guy, Citation1998; Wrigely & Lowe, Citation2002). Author's calculation is based on the data from the BSB (Citation1983, 2003–2007). Such as the fact that Beijing is a northern city where the lack of nightlife is a problem for the operation of convenience stores, and high competition from other retail formats especially surrounding supermarkets and mom-and-pop stores where many commodities are lower priced. These services include accepting transportation card as a type of payment, installing ATM in the store, taking payments from customers on behalf of banks and utility companies, selling newspaper and flowers, and so on. It is estimated that in 2005, the four retailers captured a market share of about 50% (Liang, Bao, & Zhang, Citation2005). Located near the Fourth Ring Road NW, the Golden Resources Mall was opened in October 2004. Century Jinyuan Group, one of the largest real estate developers in China, is the developer and investor of mall projects. With a total investment of 3.8 billion yuan and a planned building area of 680,000 m2, the six-floor mega-mall is claimed to be the largest shopping mall in the world (China Retail Network, Citation2004). One reason, according to some analysts, is that many home improvement hypermarkets in China have not developed a centralised procurement system, which is crucial for the operation of large retailers in the West. In addition to helping cut the logistics costs, such systems ask retailers to purchase products first before selling to consumers; and retailers provide some post-sale services. In China, home improvement hypermarkets sell products for manufacturers and become commission agents, while manufacturers are responsible for post-sale services. This makes them less convenient to consumers than home improvement markets where manufacturers and/or their agents sell their products directly and can help solve product or installation-related problems quickly (Guo, Citation2006).
Publication Year: 2010
Publication Date: 2010-10-08
Language: en
Type: article
Indexed In: ['crossref']
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Cited By Count: 27
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