Development of the grocery retail market in China: a qualitative study of how foreign and domestic retailers seek to increase market share

Purpose – The purpose of this paper is to investigate the development of the grocery retail market inChina. International retailers have been in China for more than ten years, during which period a seriesof profound changes has occurred in the Chinese retail sector. International retailers introducedadvanced retail techniques and managerial approaches; domestic retailers grew more sophisticated intheir supply chain management. Foreign-based retailers in China can compete in hypermarket andsupercentre formats because they offer higher-quality products and achieve larger economies of scale.Domestic retailers compete by operating smaller formats and maintaining good relationships withgovernments and local communities. However, formerly state-owned domestic retailers appear lesscompetitive because they lack funds and adopt poor management styles. This study aims to makerecommendations about future developments by domestic and foreign grocery retailers.Design/methodology/approach – The paper takes the form of a qualitative study involvingin-depth interviews with four retailers: Wal-Mart, Bonjour, Wu-Mart, and Jingkelong.Findings – The findings pertain to several different themes, including consumers, businessrelationships and distribution centres, product lines, store formats, quality systems, and competition.Research limitations/implications – The study’s findings are based only on four retailers.Practical implications – The paper presents a series of recommendations for both foreign-basedand domestic retailers.Originality/value – This research is among the first to investigate operator attitudes towardcompetition in the grocery retail market in China.