China'S Department Store Market: A New Wave Of Foreign Investment Entering China

On the one hand, the first batch of foreign-funded enterprises to enter China are facing the business confusion caused by the expiration of the lease and the rents of rent. On the other hand, the new entrant of the Lord of Buddha and Messi stores are ready to take the lead.

After 15 years, a new round of foreign capital entering China has ushered in the Chinese department store market.

On Thanksgiving Day last November 25th, Messi store in New York was full of people.

In the first quarter of this year, the company's profit grew by 38% over the expectation of its localization and online shopping strategy.

On the one hand, the first batch of foreign-funded enterprises entering China are facing the business confusion caused by the expiration of the lease and the rents of rent.

The entrenched and ready for new entrant.

After 15 years, a new round of foreign capital entering China has ushered in the Chinese department store market.

Foreign department stores enter China in batches

A few days ago, the famous chain corporation Messi Department announced that it had reached an agreement with China's high-end shopping website, Jiapin net, and got a small stake in Jiapin net by way of capital injection, and opened the department store of Messi Department on the new online shopping website in Europe and America to sell its own brand products.

This is Messi's department store and after the cooperation of Xiu Xiu net, once again join hands with China's online shopping enterprises.

Messi, chairman and CEO Terry J Lange, said that one of the purposes of Messi department store and Jiapin net is to quickly grasp the information of Chinese consumers in shopping habits and shopping patterns, so as to fully understand the characteristics of the Chinese market.

In the industry view, this is enough to show that Messi's department store is testing the Chinese market's response and acceptance to its products.

In fact, in addition to Messi's department store, many foreign giants are targeting the Chinese market, especially the Beijing market.

Yintai group revealed last year that its "Yincheng city in Hangzhou West", which is being prepared in Hangzhou, will open at the end of this year. In addition to its own department store brand Yintai department store, Martha, the largest multinational business retail group in Britain, will also appear in Yintai city as a main store.

In 2008, Martha stores opened the first Chinese shop in Shanghai, and then began to force the Chinese market, and reached a cooperation with Wanda Group to accelerate the pace of expansion.

According to sources, the location of Martha's department store in Beijing is also in progress.

In addition, Paris's Lafayette department store, which has been away from the Chinese market for 15 years, has officially announced its return to Beijing last year. Its property opposite Xidan's Joy City has been completed and the mall will open next summer.

Upgrading core business circle

Although the industry generally believes that the number of business super numbers in Beijing has been basically saturated, but for relatively mature foreign retail giants, Beijing is still unable to give up a huge cake.

Especially when the first batch of foreign retail groups represented by Carrefour and WAL-MART entered China for nearly 15 years, the reasons for the first lease being expired and the rents of commercial real estate skyrocketing were pushing the adjustment and change of Beijing's commercial pattern.

A commercial real estate group executives believe that with the rise of commercial real estate rents and the scarcity of core business areas, Beijing's commercial focus is shifting from the city center to the suburbs, and the expansion of business circles is obvious.

Li Sheng, chairman of IBMG international business management group, also believes that in the next few years, the retail outlet of the core business circle will usher in "closing tide" or "moving tide".

After the "low-end" format of the core area is "retreated", a number of high rent mode will be settled on a large scale to complete the upgrading of the core business circle.

Maybe this is foreign capital.

The group has dozens of opportunities to go to Beijing.

In the view of the industry, compared with most existing department stores in China, the popularity of Messi and department stores and their experience accumulated over the past hundred years have made it easy for them to become the recipients of the upgrading of core business circles.

CEO Paul Drawood, a French department store, said in an exclusive interview with the Commercial Daily reporter that the department store has been conducting market research and waiting for the opportunity to re enter Beijing after closing the Beijing store in Wangfujing 14 years ago.

Paul believes that after the baptism of the 2008 Olympic Games, Beijing has rapidly grown into the most active luxury goods consumer in the Asia Pacific region in 3 years.

Unlike the characteristics of the Wangfujing business district, which are dominated by tourist purchases, the Xidan fashion world's fashion fads and the world's top brands show great business opportunities.

"We found that Xidan has become the mainstream high-end retail consumer in Beijing. I think the time is ripe."

Paul said.

Occupation of the market is hard to say.

Compared with 15 years ago, the Beijing market showed more rationality and inclusiveness towards foreign-funded retail enterprises.

Earlier, some people in the industry believed that the expansion of foreign retail enterprises in China would have an adverse impact on China's economic security and the adjustment of its industrial chain.

But after many years of development, Chinese enterprises have not been buried in the wheel of history, but are developing more vigorously. Both the scale of enterprises and the speed of development are catching up with foreign counterparts.

"The current situation is both opportunities and challenges for foreign retail groups who are waiting to enter Beijing, or for existing enterprises in Beijing market."

A brand research institute researcher said.

Wang Zhiming, a specially appointed lecturer of the commercial real estate Specialized Committee of the National Federation of industry and commerce, believes that the entry of foreign retail groups is not a bad thing for local retailers.

"Mature foreign retail groups will inject advanced ideas and business models into the market, but will stimulate innovation and upgrading of local enterprises."

Wang Zhiming mentioned that, since Carrefour entered China in 1995, foreign retailers have dabbled in the Chinese market, which is the fastest period in the development of China's retail business.

In addition to its own improvement, foreign retail giants entering the Chinese market have contributed to the upgrading of the industry.

Liu Hui, chief consultant of Beijing Zhao Yi Business Consulting Co., Ltd. also believes that China's department stores are waiting for a new round of revolution.

"Now that the problem of homogenization is becoming more and more prominent, the traditional joint type department store has come to an end, but now everyone is watching and waiting to see others do it first.

On the one hand, how others do it, on the one hand, how others die.

In his view, with domestic tradition

Compared with foreign large department stores with mature business models abroad, they are more suitable to be pioneers of business models.

Just like 15 years ago, when foreign retail enterprises entered China, they brought great changes to China's retail market.

But on the other hand, the possibility that foreign retail enterprises who are newly entering the Chinese market will not agree with each other in China will also exist.

In the view of the industry, the retail market in China is fiercely competitive and has its own particularity. Therefore, the experience of foreign retailers may be a double-edged sword.

Before that, many foreign retail giants who came to China with gratifying developments came across Waterloo.

As far as Beijing is concerned, home brands, best buy, and beautiful city are all victims of the development of business history.

And Martha has admitted that its first branch in China has made considerable mistakes in terms of supply chain management and clothing size.

In the view of the industry, foreign retail giants have many advantages, but their development of the Chinese market still needs to be fully understood and painstakingly managed.

China Daily reporter Chong Xiaomeng

Strategies and puzzles of foreign department stores entering Beijing

Problems faced by enterprise name measures

Messi department stores online shopping to explore the Chinese market brand recognition, low clothing and other commodity size Asian problem.

Lafayette department store works with I.T group to cater for Asian consumers, Xidan business circle, traffic inconvenience, brand adjustment, resource advantage reduction

Martha's department stores cooperate with Wanda Group to speed up the pace of expansion, lack of fashion and limited initiative.