Market analysis: Retail in Wuhan

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Recently, the economy of  Wuhan has been developing quickly. As amount of people looking for jobs in the capital of Hu Bei Province increases, the retail industry has been expanding as well, especially in the area of department stores and supermarkets. Wuhan is divided into three sections: Wu Chang, Han Kou and Han Yang which encompass the city’s 13 districts. Han Kou is the traditional area of commerce, Wu Chang has a good reputation of higher education and research in science, Han Yang is poorer than others.

Supermarkets and Department stores in Wuhan

Today, several international groups conduct business in Wuhan. With abundant funds, and plenty of goods, foreign companies first targeted supermarkets such as Carrefour, Metro, and Lotus. In 1995, LaiLai Department Store ( Taiwan ) was the first overseas company that came to Wuhan. In 1998, Carrefour opened the first supermarket in the Han Yang district. Today, there are 5 Carrefour supermarkets in Wuhan. There is one in the Han Yang district, two in the Han Kou district and two in Wu Chang. There are two Metro stores in Wuhan. One of them is in the Han Kou (Qiaokou district) and the other is in Wu Chang (Hongshan district). Lotus, a famous Thai group, has two stores in Han Kou and one store in Wu Chang. Wal-Mart first entered Wuhan in 2004. Today, it owns 10 stores in Wuhan. And Price Smart has one spot in Wu Chang which started business in 2003. RT-Mart( from Taiwan) has one supermarket in Han Kou. These supermarkets from overseas usually focus on the middle and higher income consumers. Because the majority of customers like to buy goods with lower price and better quality, they compare the differences among many supermarkets.

Zhongbai Group

The development of local retailers is also growing in Wuhan. The three biggest local groups in Wuhan are Zhongbai(中百), Wushang(武商), Zhongshang(中商). Zhongbai Group has 6 department stores(4 of them in Wuhan), 30 electrical stores, about 60 warehouse-style supermarkets which usually are 5000-12000 square meters, and about 500 supermarkets (500-2000 square meters). Zhongbai Group owns many famous brands in Wuhan including Zhongbai Cangchu (warehouse- style supermarket), Zhongbai dianqi (electrical store), Centre Department Store(武汉中心百货), Qingshan Department Store (青山百货), Jiangxia Centre Department (江夏中心百货), Wuhan East and West lake Centre Department Store (武汉东西湖百货). These small-to-middle sized supermarket also provide comprehensive services like sending express mail, recharging bus cards, pay for electricity bills and telephone bills, and selling newspapers and magazines. Zhongbai Group targets the middle and lower income consumer group. Although the purchasing power of this group is fairly low, consumer base is very large. The Zhongbai Group has also began extending its business including department stores and supermarkets to the second and third tier cities around Wuhan. In these smaller cities, people are usually poorer and the commerce is undeveloped. However, people in these cities tend to think that products in supermarkets are better than the market attracting a large number of customers.

Wushang

Wushang, another popular name in retail in Wuhan, has five department stores including Wuhan Department Store (武汉商场), one of the top 10 in China, and Wuhan Plaza (武汉广场), Shi Mao Plaza (世贸广场), Jian Er Department Store (建二商场), and Wuhan International Plaza(武汉国际广场). Furthermore, Wushang Discount (武商量贩) is the brand of supermarket under Wushang Group. In 2007, the first Super Life supermarket opened in the Wuhan International Plaza. Since 2007, Wushang Discount has opened 3 Super Life supermarkets in Wuhan focusing on the higher income customers. These supermarkets are famous for higher quality and more expensive food including a special zone for imported foods. Although a few years ago, Wushang Group attempted to extend Wushang Discount store to some second and third tier cities, it failed to achieve the success it had in first tier cities. Today, Wushang Group specifically targets the high-end market in both its department stores and supermarkets.

Zhongshang Group owns several famous department stores as well such as the Zhongnan Department Store ( 中南商场),  Zhongshang Plaza (中商广场), Zhongshang Shopping Mall (中商销品茂), and seven other department stores of Zhongshang in smaller cities near Wuhan. The Zhongshang Shopping Mall opened in 2005, and was the biggest shopping mall in central China. Zhongshang Fair Price (中商平价) is Zhongshang Group’s  supermarket brand. It has 20 branches in Wuhan. Although in Wuhan, Zhongshang does not own as many stores and supermarkets as Zhongbai and Wushang, it owns the most branches in other cities in the Hu Bei Province.

Hanshang has three department stores in Wuhan, the Han Yang Department Store (汉阳商场), Hanshang 21st Century Shopping Mall (汉商21世纪购物中心) and Wu Zhan Shopping Mall (武展购物中心).

Department stores

Apart from these huge groups, there are several companies that also own competitive department stores. Sogo Department Store, from Taiwan, has a branch in the Han Kou (Jianghan district). New World department store has six branches in Han Kou, Wu Chang, Hanyang. Gran Ocean Department Store (大洋百货), also from Taiwan, has 4 branches in Wuhan. Qunguang Department Store (群光百货), another company from Taiwan, has just one branch in Wuhan, near Wuhan University in the electricity market zone. Its customers are mainly young white-collar workers, so this department store has a lot of modern fashion brands. And Wangfujing Department Store (王府井百货), the branch of Wangfujing Group in Beijing, and Yintai Department Store (银泰百货) , the branch of Beijing Yintai Group, are popular for middle income people as well, because they have some quality brands for an affordable price.

Besides Wushang Group, these groups mainly focus on medium-quality brands to meet the needs of the middle class people and young people. They sell the same brands and offer the same discounts. Most of these department stores, including the high level, also have similar layouts for their stores. They usually use price and new brand names to differentiate themselves from their competition.

Today, chain store of exclusive shops, such as pharmacies and basic necessities shops, are expanding rapidly. Jiuzhoutong (九州通), Zhonglian(中联), Tiancheng(天成), Laobaixing (老百姓) , Derentang(德仁堂), Tongjitang(同济堂), Mayinglong(马应龙) are famous chains of pharmacies in Wuhan. They usually sell similar medicines but some offer Chinese herbal medicine. Watsons (屈臣氏), the most famous basic necessities chain in Asia, has 24 branches in Wuhan. Mannings(万宁), another famous chain, has two branches in Wuhan. Watsons offers many low-price cosmetics and is very popular among women. Although Mannings is very popular in Hong Kong and other areas, it is not as popular in mainland China as Watsons.

Sources:

Picture Source:  Wuhan

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