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

The purpose of this paper is to investigate the development of the grocery retail market in China. International retailers have been in China for more than ten years, during which period a series of profound changes has occurred in the Chinese retail sector. International retailers introduced advanced retail techniques and managerial approaches; domestic retailers grew more sophisticated in their supply chain management. Foreign‐based retailers in China can compete in hypermarket and supercentre formats because they offer higher‐quality products and achieve larger economies of scale. Domestic retailers compete by operating smaller formats and maintaining good relationships with governments and local communities. However, formerly state‐owned domestic retailers appear less competitive because they lack funds and adopt poor management styles. This study aims to make recommendations about future developments by domestic and foreign grocery retailers.

The paper takes the form of a qualitative study involving in‐depth interviews with four retailers: Wal‐Mart, Bonjour, Wu‐Mart, and Jingkelong.

The findings pertain to several different themes, including consumers, business relationships and distribution centres, product lines, store formats, quality systems, and competition.

The study's findings are based only on four retailers.

The paper presents a series of recommendations for both foreign‐based and domestic retailers.

This research is among the first to investigate operator attitudes toward competition in the grocery retail market in China.