Specialist
Former Senior General Manager at Aldi (China)
Agenda
- Development history and strategies of foreign supermarket chains in China
- Aldi’s strategic positioning, store productivity, sales efficiency, purchase channels, assortment logic and profit margins in China
- Aldi’s online sales performance and development planning
Questions
1.
Suning recently bought 80% of Carrefour’s stake in China unit, and the Thailand-based Lotus issued its financial statement, claiming that it has operated at a loss for six years. What’s your view on the development of foreign supermarket chains in China over the past 10 years?
2.
It’s noticed that foreign retailers have made some adjustments in recent years. In 2014 Tesco sold its operation in mainland China to CR Vanguard; in 2017 South Korea-based Lotte retreated from China; in 2018 Auchan partnered with RT-Mart. Why do foreign retailers team up with Chinese players? Is this because they cannot adapt themselves to China’s market?
3.
Does this mean foreign retailers such as Aldi and the future newcomers have to partner with local giants in the days to come?
4.
Let’s take a look at Aldi. This June, Aldi opened two stores in Shanghai. As a retailer with over 10,000 stores worldwide, Aldi wasn’t considered a high-end supermarket before, while since entering China, it allegedly has targeted the mid-range and high-end consumers. What do you think of the timing of Aldi entering China? What motivates Aldi to open offline stores in China?
5.
Dia had its private labels when it entered China’s market, didn’t it?
6.
You said the retailers could take an original design manufacturer (ODM) model like NetEase Yeation to run their private label businesses except for food. Do you think the ODM model of NetEase is the opposite of Aldi’s model?
7.
Aldi’s model is idea-oriented, while that of NetEase Yeation was supply chain-oriented, so consumers may have different shopping experiences. Could you analyse Aldi’s positioning in China’s market?
8.
Aldi has developed its online branch since several years ago; could you comment on the performance of its online business?
9.
Costco has employed similar strategies. Will there be fierce competition between Costco and Aldi? Are there any differences between their consumer bases?
10.
You have mentioned that Aldi has limited SKUs and high quality goods, which help it defeat Walmart in Europe especially in Germany. Aldi has managed to maintain cost at a low level in Germany. Can Aldi keep that advantage in China?
11.
What is Aldi’s plan for opening stores?
12.
What is the proportion of private labels at Aldi? Is it 50%?
13.
What are Aldi’s purchase channels in China in addition to imports?
14.
Aldi normally signs long-term contracts with suppliers, most of them lasting for 10 years. What is the term of cooperation between Aldi and Chinese suppliers?
15.
Thanks to stable suppliers, a product can be for sale for 2-3 years at Aldi. Will that be a restraint on Aldi’s catching up with China’s fast growing market?
16.
According to public data, an average amount of SKU in the US retail industry is around 14,000, while Walmart has over 20,000 SKUs. The two Aldi stores in Shanghai, however, only have about 3,000 SKUs under 15 categories such as alcohol, snacks and fresh food. What is Aldi’s assortment strategy in China and how does it differ from that in Germany because it seems that Aldi stores in Germany have more SKUs?
17.
Does it make sense to say that high cost performance, good quality and unique environment are Aldi’s competitive advantages?
18.
Aldi and Yonghui Superstores operate similarly in this respect, while Aldi is of larger scale and has its private labels. Can I understand it this way?
19.
You have mentioned that the sales efficiency is quite high at Aldi’s stores outside China where a typical Aldi store employs seven people. But the Aldi store at Jingan Sports Centre in Shanghai has 16 employees. Is that correct?
20.
What are the store productivity and sales efficiency of Aldi in China?
21.
Aldi puts up posters with quick response codes through which consumers can make orders on a WeChat mini-programme so that consumers can shop without leaving any record at the cashier’s. It also has a fast delivery service within 3km from the store. It the service carried out by Ele.me’s delivery team?
22.
Will it work if Aldi develops its own delivery services?
23.
Although Fresh Hema has worked out the entire chain and opened both online and offline stores, it keeps losing money. Will Aldi make a difference?
24.
Do you have anything to add?
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