US retailer reshapes China strategy
23/4/2003 13:13
US retail giant PriceMart Inc. is reshaping its strategy in China,
which market analysts say is a sign that competition in the sector is extending
to foreign hypermarkets.
The analysts said competition in China's retail
sector has intensified, especially as US giant Wal-Mart--PriceMart's long-time
rival from its home territory--will open its first outlet on China's mainland in
Beijing next month.
PriceMart will operate its Shijingshan outlet under a
new system starting this Friday, following a two-month project to transform it
from a membership store into a regular non-membership one.
Market
analysts described the shift as a bid to avoid pressure following the arrival of
Wal-Mart, whose first China outlet, also in Shijingshan, is only 1 kilometer
away from the PriceMart store.
The analysts say Wal-Mart's membership
shopping style would have encroached on PriceMart's customer base, leading
PriceMart to shift its strategy.
PriceMart officials denied the analysis,
saying the company made the decision based on a study of consumption behavior in
the area over the past year, which indicated low acceptance of membership
shopping.
The new Shijingshan PriceMart store will offer cheaper products
in a larger variety, they said.
Unlike all of PriceMart's other 10
outlets in China, the new store will not deal in
wholesaling.
Jane Chen / Shanghai Daily news
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