Industry Analysis Case Study

China's Retail Industry (B): Consumer Behaviour and Competitive Responses

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Abstract:
While case (A) enables an analysis of China's retail industry dynamics, case (B) provides scope for analysing Chinese consumer behavior (with specific reference to retailing). Using this analysis, students can decode the variety of competitor's responses Each one wants to their slice (a bigger one though) of the retail cake. Whose strategic moves are viable? Which company is better poised to tap China's retail potential? Since economic reforms in the 1980s, China's production and productivity rapidly grew, while average consumption growth was slower. No doubt, consumers create a huge retail potential. . But, do they have similar aspirations? So, what should companies assume? Do their assumptions mismatch consumer aspirations? More so, as the Chinese consumer tends to save more than spend, how can retailers get them to do the reverse?

Pedagogical Objectives:

• To understand the (ever-) changing consumer behaviour in China and debate its effects on the way retail companies respond
• To juxtapose and analyse the obvious paradoxes in these responses (which can help better in converting adversities into advantages?).

Keywords : Wal-Mart; Carrefour; Chinese Consumer Behaviour; Economic reforms in China; Centrally planned economy; Investment-led growth; Industry Analysis Case Study; Consumption-led growth; Organised retail industry; China's traditional retail industry; Re-balancing of the economic growth; Saving patterns in China; Consumption patterns in China