Convenience stores adapt to change

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By Hong Liang (China Daily)
Updated: 2008-11-11 07:44

It's bright, clean and well-stocked with the daily necessities that any modest person would ever need. And the best part is that a spanking new example is going to open right across the street from where I work and live.

Since moving to Beijing, the thing I really miss about Shanghai is the convenience store. There were at least five convenience stores in the 20-minute walk between my office and home in Shanghai. In Beijing, you literally have to go out of your way to find one.

Of course, there is no shortage of grocery stores and mini-markets in most Beijing neighborhoods. But the ones I've been to were dirty, dimly-lit and poorly organized. In one store, every can of the brand of can-food I wanted was dented.

My colleagues, who work nights, have complained endlessly about the early closing hours of the stores. It's never a big problem. But taking a taxi to the closest restaurant at two in the morning for a bowl of noodles isn't exactly fun.

There is usually little to be said about shopping at a convenience store. The opening of a Seven-Eleven store in the neighborhood has never had been a reason for rejoicing, until now.

As we celebrated our good fortune over a cup of coffee in the smoking area overlooking hectic work going on in the new store, we couldn't help wondering what impact it would have on the other shops in the area. Maybe Shanghai can provide some guidance.

Fierce competition has forced many domestic retailers to adopt chain store business models in the fight for survival. They have proved that they are no slough in adapting to a fast-changing business environment and ever-rising consumer expectations, at least in Shanghai.

I witnessed how a rundown mini-market owned by a local chain at the street corner near the apartment block where I used to live in Shanghai transformed itself convincingly into a convenience store that rivals those of Seven-Eleven, or Lawson, for that matter, in cleanliness and, of course, convenience. Other than the logo, which is made up of the Chinese name of the chain, this store is no different from any other convenience store in Shanghai or Hong Kong.

In fact, the formula for success of those stores in Shanghai and Hong Kong is not any trade secret. The store hardware and the supply chain mechanism of these stores are familiar to many retailers. What differentiate one chain from another are in the areas of marketing and in-store service.

In most convenience stores, the emphasis is on convenience and speed. The standard of service is judged almost entirely on how little time it takes for the customer to wait at the cash register counter for the purchase to be processed.

But speed does not have to be the only rule of the game. The store near my home in Shanghai, for instance, tried to introduce some form of personal service by having attendants to answer customers' queries, help them find the items they wanted to buy, or just listen to their complaints about inflating grocery prices or unruly offspring. This business tactic seems to work very well in attracting and maintaining a host of loyal patrons from the residents in the nearby sprawling tenement compound.

As such, the stores in my neighborhood should view the appearance of a new Seven-Eleven outlet as a clarion call to face the challenge of a more demanding public by improving their stores and customer services. The less desirable option is to compete on price and accept a narrower profit margin. Either way, it's good for the consumers.

E-mail:jamesleung@chinadaily.com.cn

(China Daily 11/11/2008 page8)