Main Topic: Chinese Shoppers in Tesco

Hosts: James Stanworth , Clyde Warden

James and Clyde were out in Shanghai and debating where to go. Clyde said, "Hey, you know there is a Tesco around the corner from here. We should go take a look." James responded, "Ah, I'm getting tired of seeing TESCO. They all look the same. We've seen it all." Having seen a lot of Tesco and talked about it in Show 12, we were in for a big surprise. In this episode, James and Clyde go shopping at Tesco in Shanghai and report back their surprising findings.

Tesco entered China in 2004 in a partnership with Ting Hsin International Corporation. Now in a 90:10% partnership arrangement they have 58 stores all centered on the East coast of China. Rather than the hyper sterile environment of what we saw in Tesco Taiwan, this store has crowded sale signs right up at the entry. Tesco has localized much more in Shanghai then they ever did in Taiwan. Inside, there is a large fresh section, and check out the photo of the fish that got away (photo 19). Lots of ready to eat at the back of the store, drawing shoppers in past all the specials. Overall, the store feels smaller--not the giant Walmart space, but the more local corner supermarket offering some convenience, some fresh, and a ready to eat. This may be a niche Tesco aims to fill as this rapidly expanding market matures.

Tesco exited the Taiwan market in 2005 turning over more than 2000 employees to Carrefour.

Catch show 72 on Walmart in Shanghai.

The contrast between Taiwan and China is massive. . . it reveals a huge journey.

Photos:

• (1) Rice bowls on sale. (1) Rice bowls on sale.
• (2) Lots of signage with price specials. (2) Lots of signage with price specials.
• (3) Entering store. (3) Entering store.
• (4) Classic Chinese signage. (4) Classic Chinese signage.
• (5) Short isles. (5) Short isles.
• (6) Lots of stock piled up in store. (6) Lots of stock piled up in store.
• (7) Sign indicating a product category moved to another isle. (7) Sign indicating a product category moved to another isle.
• (8) Construction within the store. (8) Construction within the store.
• (9) Ready to eat foods. (9) Ready to eat foods.
• (10) Prepackaged ready to eat. (10) Prepackaged ready to eat.
• (11) Freshly cooked foods--chicken. (11) Freshly cooked foods--chicken.
• (12) Construction not hidden. (12) Construction not hidden.
• (13) Somewhat out of date freezers. (13) Somewhat out of date freezers.
• (14) Independent stands seelling product. (14) Independent stands seelling product.
• (15) Ready to eat with sales staff. (15) Ready to eat with sales staff.
• (16) More ready to eat. (16) More ready to eat.
• (17) Frozen meals, not very much here. (17) Frozen meals, not very much here.
• (18) Fresh meats. (18) Fresh meats.
• (19) The fish that got away. (19) The fish that got away.
• (20) Caught after a struggle. (20) Caught after a struggle.
• (21) Frozen poultry. (21) Frozen poultry.
• (22) Packaged meats. (22) Packaged meats.
• (23) Chilled section. (23) Chilled section.
• (24) Frozen poultry. (24) Frozen poultry.
• (25) Open vats for consumers to dig through. (25) Open vats for consumers to dig through.
• (26) Large promotion piles, encouraging digging. (26) Large promotion piles, encouraging digging.
• (27) Fresh fruit area is large. (27) Fresh fruit area is large.
• (28) James finds some fruit he likes. (28) James finds some fruit he likes.
• (29) Bread area is small. (29) Bread area is small.
• (30) Vegi displays are simple and straight forward, allowing selection. (30) Vegi displays are simple and straight forward, allowing selection.
• (31) Corn piled up. (31) Corn piled up.
• (32) Plenty of staff on hand are quick to help customers. (32) Plenty of staff on hand are quick to help customers.
• (33) Staff walk all about the store. (33) Staff walk all about the store.
• (34) Entrance isle, lots of specials and signage to generate attention--create crowding. (34) Entrance isle, lots of specials and signage to generate attention--create crowding.
• (35) Stocking work going on. (35) Stocking work going on.
• (36) Center of store has space for rotating displays, here fresh fish. (36) Center of store has space for rotating displays, here fresh fish.
• (37) The display is very simple, looking like the fresh market. (37) The display is very simple, looking like the fresh market.
• (38) Tesco's brand is available in the staples, like cooking oil. (38) Tesco's brand is available in the staples, like cooking oil.
• (39) Manufacurer POP display. (39) Manufacurer POP display.
• (40) Lots of candy for the holidays. (40) Lots of candy for the holidays.
• (41) Seeds, mushrooms. (41) Seeds, mushrooms.
• (42) Seeds, and rice, open for customers to dig through. (42) Seeds, and rice, open for customers to dig through.
• (43) Lots of Tesco brand in the sundries section. (43) Lots of Tesco brand in the sundries section.
• (44) A small sundries section, on the same floor. (44) A small sundries section, on the same floor.
• (45) Shelf design looks a lot like the street market. (45) Shelf design looks a lot like the street market.
• (46) Personal care section with all the big Western brands. (46) Personal care section with all the big Western brands.
• (47) Toothpaste, a bit expensive. (47) Toothpaste, a bit expensive.
• (48) Display construction going on. (48) Display construction going on.
•  

Show Links:

• Tesco China

Bottom Line:

• Tesco's Taiwan efforts were highly Western; Shanghai is starkly different.
• Tesco is aiming at the mainstream customer... not like in Taiwan where it was more about Tesco.
• They create a comfortable, inviting, servicescape for locals--no money wasted on Westernized idealized retail spaces.
• In Taiwan there was a strong sense of don't touch just put in the basket and go.
• The Shanghai store invites participation.
• The store's retail space is flexibility to shift configuration for local festivals etc.
• They have adopted local consumers' values--especially when it comes to comfort levels.
• MSense of crowding and the store being in process, rather than sterile, helps shoppers feel comfortable.
• The Tesco store brand is prominent on the shelves.