Why Do Foreign Department Stores Fail In Wuhan?

The absolute volume of Commerce and trade has been steadily ranking the sixth largest and medium-sized cities in the country in recent years, and the strength is hard to shake.

According to the urban population, Wuhan has an area of 0.38 square meters per capita, and the market is almost saturated.

The external department store itself has a high operating cost. If there is no killer, its positioning is not accurate, and it is difficult to base itself on the consumption psychology of Wuhan residents.

For foreign businessmen, Wuhan is a gold rush for the eight party, and it is also a depressing slope.

Recently, the SOGO (Zhuang Shengchongguang) department store, which was held for 14 years in Han Dynasty, was reportedly "evacuated from Wuhan" because of its gloomy business.

The mall responded by saying that a large number of brand dismantling is only "business rectification" needs.

No matter whether it is withdrawn or rectified, SOGO has already had a weakness in its previous battle with local commercial enterprises.

This is also a large foreign business enterprise that has lost the competition with the four big commercial groups (Wu Shang, Zhong Shang, Zhong Bai and Han merchants) of Hongkong Tianhe department store, Beijing investment exchange, Shanghai investment Shanghai mall and Guangzhou investment Guang Bai department store.

Insiders questioned: is there still room for foreign commercial enterprises to enter such a mega city with tens of millions of population?

External department is not acclimatized.

In September 1st, the reporter came to the SOGO department store on liberation Avenue, which is located in the busy core business circle of Wuhan. But the current situation of the shopping mall is somewhat out of tune with the surrounding noise.

Most of the counters on the first floor have been emptied. Only a few jewellery and glasses brands are still open.

On the first floor, Zhou Dafu, the lady who was picking jewelry, told reporters, "I heard that SOGO was closing down. I hurried to spend the shopping cards that I hadn't finished."

C&A storefront, two storeys across shopping malls, there are not many customers to go shopping.

The atrium elevator, which is connected with the C&A shop, has suddenly installed a glass door. It has been locked. There is a notice posted on it: "SOGO Shopping Center renovation, please enter the 4, 5, 6 floors from the other entrance".

Through the glass door, it can be seen empty.

In the C&A counter, the reporter was very concerned about the situation of the shopping mall. A salesperson asked the reporter if he wanted to rent a counter.

"Rectification has been here for a month now, and we are left with this garment in business."

The salesperson told reporters that a month and a half ago, many of the counters were slowly evacuated, and their clothes had been selling well, and they remained open until now.

Reporters from the staff entrance to the 7 floor of the building, the mall office area is quiet, employees are still doing the work in an orderly manner.

"We are just adjusting, not to say that the outside world is going to collapse."

A staff member interviewed by reporters said that now the shopping mall is in the rectification stage, and it is inconvenient to disclose much.

"If we really leave Wuhan, we will issue a notice."

For the business model adjusted after shopping malls, the person said it was not easy to disclose.

An industry insider familiar with the department store said that although SOGO has been a hit in Wuhan, it is no wonder that such a "rectification" or "withdrawal" of commercial enterprises is not surprising.

He said that from 1998 to now, the Shanghai shopping mall in Shanghai, the Tianhe department store, the Plaza in Guangdong, the Pearl River Shopping Mall in Guangdong, the Bahui mall in Taiwan, and the public opinion Plaza of Taiwan capital have "lost Jiangcheng", and the opening of the scenery and soon died.

At the end of last year, the Changjiang Plaza Shopping Center, which was invested by Singapore in China, was unable to return to the sky after several rounds of consolidation.

General manager Mo Jia Jie left a sentence when he left: "the promotion means of the four major commercial groups in Wuhan have reached the peak. However, we do not understand the business climate of Wuhan and the shopping habits of the people. There are also problems in the choice of addresses. In the early days of opening up, the positioning of goods is relatively high and the competition is at a disadvantage."

Before this, many foreign department store executives sigh, Wuhan's local business "water is too deep", intervention threshold is too high.

It is understood that

The absolute volume of Commerce and trade has been steadily ranking the sixth largest and medium-sized cities in the country in recent years, and the strength is hard to shake.

According to the urban population, Wuhan has an area of 0.38 square meters per capita, and the market is almost saturated.

The external department store itself has a high operating cost. If there is no killer, its positioning is not accurate, and it is difficult to base itself on the consumption psychology of Wuhan residents.

In fact, in order to build a foothold in Wuhan, these enterprises have made many efforts.

Take the SOGO which is known as "rectification" to the outside world as an example.

A few years ago, SOGO operated more than 150 women's clothing brands at the same time, becoming the only fashion shop in the central China with 6 women's clothing floors, trying to build the first female fashion theme pavilion in Central China.

However, it did not achieve satisfactory results.

In addition, there was once a hundred full of confidence.

It is reported that in order to enhance the deep competitive advantage, more products are displayed in Hongkong, Europe and America as well as Guangzhou local brands.

But as the leader of Guangdong Department store, the reason why Guang Bai lost its way in Wuhan is the serious "acclimatization".

On the one hand, the brand effect of Wuhan is very obvious, and it also pursues fashion and fast rhythm.

Because the renewal speed of goods is too slow to keep up with the demand rhythm of Wuhan people.

After entering Wuhan, Guang Bai did not succeed in docking with the local hot dealers.

On the other hand, the more famous brands in Guang Bai department store are not only famous in Wuhan, but also because of the different regional environment, which results in different aesthetic standards and needs.

For example, people in Guangzhou like bright and colorful clothes, and they may feel old-fashioned and unacceptable.

It is reported that over the past ten years, more than ten foreign department stores have entered the business sector of Wuhan, but only three or four of them are in good condition.

Although foreign capital has been frustrated in Wuhan's business, in recent years, more business chiefs have been relentlessly drilling: in March of last year, Paris's Lafayette department store went to Wuhan to investigate and intend to enter Wuhan. Prior to this, wing Wan also announced that they were stationed in Wuhan, investing more than 3 billion yuan, and opening 3 shopping centers in Dongxihu, Zhuankou and Hou Hu. The Lotte Group of Korea is currently in intensive selection of Wuhan, preparing for the layout of entertainment, department stores, supermarkets, hotels and many other formats. Last November, Hang Lung estate's first project in Central China was officially launched.

Why do they have to go forward and forward when the first time goes on? It is said that Wuhan's huge consumer groups and strong market radiation capability may be the main reason for attracting a number of foreign business enterprises to explore.

A person in charge of a shopping mall in Wuhan told reporters that "most of the foreign trade department chiefs come from other places, but the senior and senior leaders are all local talents in Wuhan, so that they can not only understand the consumption dynamics of Wuhan residents in real time, promote the development of department stores, but also be able to integrate more easily with the fashionable elements of overseas or first tier cities, and constantly bring consumers fresh feeling."