So far China has been a very challenging market for global retailers. As our China retail expert and partner Jack Chuang commented in this FT article how it is hard for foreign retailers to fully localise a well-proven ‘home’ market model for China. To make things worse, China is one of the most developed e-commerce markets — where disruption from the internet giants has the biggest impact on traditional retailers. No wonder many global retailers are struggling.
So what does COSTCO’s successful (so far) first store opening tell us about today’s China market? Here are my quick thoughts:
In China any success will attract competition quickly — and a blue ocean will quickly turn into “red”. Will COSTCO sustain its debut success? Who will ultimately win China’s membership club war? Will Chinese local retailers like Alibaba, Suning or Yonghui launch competing formats and win (again)? We will wait and see…
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