Main Topic:

Hosts: Stephen Huang , James Stanworth, Clyde Warden

Guest: Jane Lu, Ph.D.

Before hypermarkets, there were supermarkets (although they may not look very super compared to their UK and US brethren). Commonly called groceries in the West, and in Chinese called supermarkets. The small scale corner supermarkets are going strong in Taiwan, Hong Kong, and China, with even Walmart buying into these smaller chains (Trust-Mart). In this show, Jane Lu helps us understand the advantages these small scale stores offer to consumers, and why they continue to do well.

This topic has an accompanying research show (show 16) for marketing researchers. Stephen, James, and Clyde talk in more detail about the values these different supermarkets address and how that relates to different market segments. To view the supplement and other research related shows, register and/or sign in.

The smaller of these stores are just marginally larger than a convenience store (normally 25-40 ping). Wellcomes and Chen Lien tend to be the smallest at around 90 ping with Sinon and Capita'ns much larger (approx. 300 ping).

SINON (興農股份有限公司) Interestingly, their local URL is supermarket.com.tw (over 38 outlets), and here is their English Website . A local chain owned by Wei Chuan Food Corp . This supermarket often caters to local rituals and has a long, well developed channel relationship with agricultural suppliers (meaning better fresh produce).

YuMaoWu (裕毛屋‹) now Capita'n (凱福登) from Japan, represents the very high end of the supermarket segment. Walking in is like visiting Japan. The Kit Kat photo is a good example, not only can you get flavors of Kit Kat only found in Japan, the packaging is just the same as that complex and cute packaging found in Japan.

Wellcome 頂好惠康 (Wellcome Hong Kong ), Taiwan's largest supermarket chain, from Hong Kong, owned by Dairy Farm International Holdings Ltd. (over 165 outlets).

Matusei (丸久超市‚), with over 30 outlets, emphasizes their Japanese background, although the store is very localized now. You won't find much in the way of Capita'n's Japanese products, but there is some of the same design element and service.

Left over from an earlier era, but still going strong is the military camp store Pxmart (Chen Lian) 全聯福利中心 ƒ(note the URL is pxmart.com.tw with PX, which means Post Exchange as in military camp store). Incorporated in 1974, now with over 208 stores and revenue passing 15 million USD. The market segment is daily household supplies and food stuff (packaged), which translates into a very similar demographic to wet market shoppers.

The corner supermarkets are situated in locations that are familiar to the locals.

Photos:

• 1) Pxmart (Chen Lien) is a market leader, but you would never be able to tell it from the store design. 1) Pxmart (Chen Lien) is a market leader, but you would never be able to tell it from the store design.
• 2) Pxmart has cleverly played on their fudy dudy image (see the commercials). 2) Pxmart has cleverly played on their fudy dudy image (see the commercials).
• 3) Little parking, but normally located near wet markets and other busy shopping areas for family daily needs. 3) Little parking, but normally located near wet markets and other busy shopping areas for family daily needs.
• 4) Sinon makes a bold statement with their store fronts (and the parent company's baseball team). 4) Sinon makes a bold statement with their store fronts (and the parent company's baseball team).
• 5) Limited parking is usually available, in the back also when possible. 5) Limited parking is usually available, in the back also when possible.
• 6) Sinon uses plenty of DM and special pricing. 6) Sinon uses plenty of DM and special pricing.
• 7) Rather than focus on low pricing, Sinon tends to center on bundling, especially related to local holidays and religious ceremonies. 7) Rather than focus on low pricing, Sinon tends to center on bundling, especially related to local holidays and religious ceremonies.
• 8) Daily goods are emphasized for a quick stop in to the store, but most shoppers seems to be going in for food prep. 8) Daily goods are emphasized for a quick stop in to the store, but most shoppers seems to be going in for food prep.
• 9) Bundles of fruit for Taoist bai bai ceremony. 9) Bundles of fruit for Taoist bai bai ceremony.
• 10) All required foods ready to go. 10) All required foods ready to go.
• 11) Wellcome is another market leader in number of stores in Taiwan. 11) Wellcome is another market leader in number of stores in Taiwan.
• 12) The HK experience is very evident as no space is too small to fit a Wellcome. 12) The HK experience is very evident as no space is too small to fit a Wellcome.
• 13) Extended fresh food section with lots of choice, all broken out. 13) Extended fresh food section with lots of choice, all broken out.
• 14) From the front to the back of the store is the single wide aisle of the store. 14) From the front to the back of the store is the single wide aisle of the store.
• 15) YuMaWu is now Capitai'n. 15) YuMaWu is now Capitai'n.
• 16) These are the high end supermarkets in Taiwan. 16) These are the high end supermarkets in Taiwan.
• 17) The store design places large emphasis on the external, including tables and chairs. 17) The store design places large emphasis on the external, including tables and chairs.
• 18) YuMaoWu always carried a wide selection of ready to eat; customers have a place to eat it. 18) YuMaoWu always carried a wide selection of ready to eat; customers have a place to eat it.
• 19) Customers eating outside. 19) Customers eating outside.
• 20) This gets the attention of people walking by, who then stop in to buy some ready to eat. 20) This gets the attention of people walking by, who then stop in to buy some ready to eat.
• 21) The store change over includes a Japanese 31 Flavors. 21) The store change over includes a Japanese 31 Flavors.
• 22) Inside, this store is one of the largest of the corner supermarkets, with lots of Japanese references. 22) Inside, this store is one of the largest of the corner supermarkets, with lots of Japanese references.
• 23) Matsusei is a nice between positioned brand. 23) Matsusei is a nice between positioned brand.
• 24) The stores are not ultra modern retailing designs, but they are very functional and have more a balance of fresh food, packaged food, and daily need household items. 24) The stores are not ultra modern retailing designs, but they are very functional and have more a balance of fresh food, packaged food, and daily need household items.
• 25) Specially priced goods are often piled out front of the store. 25) Specially priced goods are often piled out front of the store.
• 26) Inside, the store has some design flavors from YuMaoWu, but the product selection and design does not emphasis Japanese retailing. 26) Inside, the store has some design flavors from YuMaoWu, but the product selection and design does not emphasis Japanese retailing.
• 27) Well lit, wide aisles, and consistent design. 27) Well lit, wide aisles, and consistent design.
• 28) A full class front draws consumers in easily. 28) A full class front draws consumers in easily.
• 29) Matsusei's fresh meat section to very big, but then again, not much smaller than Carrefour's. 29) Matsusei's fresh meat section to very big, but then again, not much smaller than Carrefour's.
• 30) What is that? 30) What is that?
• 31) Entering Wellcome with a promotion above the door 31) Entering Wellcome with a promotion above the door
• 32) A wide range of high quality from the fresh to gifts all in a super-bright space 32) A wide range of high quality from the fresh to gifts all in a super-bright space
• 33) Narrow isle, with a variety of promotional stands 33) Narrow isle, with a variety of promotional stands
•  

ConsumerCam:

Show Links:

• SINON a local supermarket
  
• Local blog about YuMaoWu (裕毛屋‹) the new design as Capita'n (凱福登)
• Local expat magazine entry about Capita'n
  
• Interview with Wellcome CEO (Good overview of Taiwan supermarket segment)
  

Bottom Line:

• The supermarkets in Taiwan have a standard setting of narrow aisles, promotional stands, and a fresh produce section. It is similar to a large convenient store.
• In a metropolitan place like Taipei, where there’s a high population density and heavy use of public transport the supermarkets provide 24Hrs service.
• The people accept the upside of supermarkets is convenience, and the downside is the lack of minor freshness. Multi channel selection is dependent on the need.
• Chen Lien is strategically placed next to most wet markets, they are a provider of everyday goods.
• The Southern Taiwanese prefer to purchase from people that are familiar with, hence the popularity of the corner markets (mom and pop stores).
• The corner markets and wet markets have a strong place in Taiwan, it is challenging for multinational companies to break into the social network.
• The quality and the freshness of the produce are dependent on their relationship with their suppliers.
• The consumers understand the following: Supermarkets provide convenience and quickness, Hypermarket is for no-rush shopping, Wet market is the place for the freshest produce.