Tuesday, July 10, 2007

A War of 'Convenient's

In the last few years, chains of small, late-opening supermarkets have sprung up all over Beijing. Quite a few of them stay open 24 hours - although there seems to be absolutely zero demand for this. There were scarcely any when I first arrived 5 years ago, but now you'll pass one on almost every street. They don't seem to be having much impact on the myriads of hole-in-the-wall mom & pop stores, because they are, of course, much more expensive. In fact, I wonder how viable they are, because they seem to be deserted most of the time. I generally prefer to support the small local shops; but there are occasions when bright lights, air-conditioning (hell, during the summer, you sometimes go into one just to cool down for 5 minutes), half-way decent refrigeration, a wider selection of stock (though still tending to overlook foreigner staples like bread and milk), and consistent pricing (rather than mom & pop's all-too-frequent "I wonder how much we can screw this guy for?" approach) win out.

Now, it's one of the obstinate quirks of 'Chinglish' that these mini-supermarkets must be called 'convenient stores'..... rather than the favoured standard English 'convenience stores'. There's no point trying to fight it: this usage is entrenched, universal, unmoveable. Oh well, one gets used to it.

You might well think that Beijing is somewhat oversupplied with such stores - but that is as nothing compared to Shanghai. There, every street corner has at least one. And in the old centre of the city, in the former 'foreign concession' districts, the blocks are very short. That means there's at least one one of these stores every 100 or 200 yards. At least one. In fact, you generally find that, on any intersection, two of the four corners are occupied by rival chains. Sometimes three of the corners. Sometimes, even all four. I think there are four or five major companies in competition, and perhaps a few other smaller operations too. Watson's, which may just about be the market leader, is, I believe, an Australian company. Lawson's I don't know about it; I half-suspect it is a Chinese copy of Watson's rather than an overseas brand. I feel there's definitely something a bit suspicious about the name of the other leading player, Alldays; it reeks of Chinglish mis-translation of "7-days-a-week" or "24-hours-a-day". Then there are one or two chains with Chinese names - which I can't remember.

Now, on a hot, sticky summer day in Shanghai, it is nice to know that you're never more than a few minutes' walk from a cold can of Coke (or a tea-egg; these Shanghai stores do try a little harder to woo the local customer by providing a range of traditional hot snacks as well as all the pre-packaged stuff).

However, the ubiquity of these stores is in other ways a bit of a pain-in-the-arse. They make every street corner look pretty much identical; and thus make navigation (especially for an occasional visitor like myself) extremely difficult. What's even worse is that the doorways of these stores are invariably cut right across the corner of the road-junction, facing diagonally across to the opposite corner of the crossroad. Maybe this is a more common arrangement in America. It's pretty rare in the UK. It does make it very difficult to remember which direction you were coming down the road when you went in (particularly when the only landmarks are the indistinguishable 'convenient stores' on most of the other corners of the crossroads). On a previous visit, I once got badly disoriented within just a few hundred yards of the friends' apartment I was trying to find my way back to, and blundered in circles around the (unlit, poorly signposted) streets for half an hour or more trying to get back on track (it didn't help that my map of Shanghai has an inconsistent approach to labelling streets: sometimes English only, sometimes Chinese only, sometimes font that's big enough to read, but usually not - and the smaller streets mostly go completely nameless. And, on this occasion, I confess it didn't help that I had become confused between the adjacent Ji'an and Jinan Streets!).

A curious case study for economists, this. How can there really be enough business to sustain 4 or 5 identical companies? Is it really the best strategy to site their stores immediately next to their rivals? Aren't there just too many of them? Which of these companies will achieve the greatest success? Will the market move eventually towards a monopoly, or is the current oligopoly a stable, sustainable long-term model?

Answers on a postcard, please. Well, in a comment, if you must.

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