“Already facing strong competition in the more developed urban markets, supermarket and hypermarket chains are now also facing competition from the rapid growth of online grocery retail. This is creating a greater need for innovation among retailers. New store formats are emerging to meet different local market needs in higher tier cities, and as chains increasingly penetrate into lower tier cities.
Retail chains are also increasingly finding they can no longer ignore online grocery retail, and are developing their own online retail sites. The growth in mobile online retail is also challenging retailers to embrace the opportunities for customer interface through these new technologies.
Increasingly demanding of convenience and product quality, rising average incomes are also making consumers more demanding in terms of their in-store shopping experience. Store ambience and good customer service are areas where retailers now find they need to improve their offering in order to stand out in an increasingly crowded market.”
Definition
This report covers the retail sale of food and non-food products through supermarket and hypermarket outlets within the People’s Republic of China. These outlets are defined as:
Supermarkets: Modern chain grocery (food and non-food) retail outlets with sales areas of between 300m2 and 5,999m2.
Hypermarkets: Modern chain grocery (food and non-food) retail outlets with sales areas of 6,000m2 and above.
Warehouse stores: Modern chain grocery (food and non-food) retail outlets that require shoppers to become members and hold a membership card before they can use the store – usually, but not exclusively, for business owners.
Modern grocery: Includes all of the above plus convenience stores (included only as a comparison against the core market), which are defined as being modern chain grocery (food and non-food) retail outlets with sales areas of less than 300m2.
Online grocery: Online retail businesses that sell both food and non-food products.
Methodology
For the purpose of this report, Mintel commissioned a quantitative research survey carried out online to explore general grocery shopping and online shopping and spending habits among consumers aged 20-49.
Fieldwork was conducted in February 2014, in four tier one cities, three tier two cities and three tier three cities of 3,000 consumers aged 20-49. The tier one cities are Beijing, Shanghai, Guangzhou and Chengdu. The tier two and three cities are Qingdao, Tangshan, Ningbo, Suzhou, Changsha and Luoyang.
Abbreviations
| 3C | Computer, communication and consumer electronics |
| CAC | China Arts & Crafts |
| CAGR | Compound Annual Growth Rate |
| CCFA | China Chain Store and Franchise Association |
| CEO | Chief Executive Officer |
| CNNIC | China Internet Network Information Centre – the administrative agency responsible for internet affairs under the Chinese government’s Ministry of Information Industry |
| CRE | China Resources Enterprise |
| JV | Joint venture |
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