Metro Cash & Carry International, the international self-service wholesale retailer based in Germany, is aiming to double the number of its Chinese outlets to 100 by 2015, a top executive said on Friday.
“We want to expand first in the 35 cities in which we already have a presence to increase our current network. However, as China is not very homogeneous in terms of economic development, we are focusing on three very prosperous areas: the Bohai Bay area, the Yangtze River Delta and the Pearl River Delta,” Tino Zeiske, president of Metro Jinjiang Cash & Carry Co Ltd, told China Daily.
“We’ve also noticed that the western part of China is growing faster than before, with the government pushing ahead to fuel domestic consumption,” he added.
The company is also looking into investing in third- or fourth-tier cities, such as Jiangyin and Yangzhou in East China’s Jiangsu province.
“Metro is taking advantage of the fast development pace of the lower-tier cities, and we will focus on opening new stores wherever our professional customers are.”
Zeiske said that foreign retailers should always put customer needs first when they enter China or seek growth in the country.
“You have to start understanding customers in the local market, and learning about their business model, thus adapting our business model to meet local needs,” he said.
He added that the goal is easy to explain, but difficult to achieve, because it requires the entire organization to embrace that view, and ensure that all functions of the company adapt to a “customer-centric” approach.
“For example, if our IT department doesn’t take customer needs into consideration, then maybe the check-out procedure in our stores will be extremely slow.”
With the Chinese government putting a high priority on boosting domestic consumption during the 12th Five-Year Plan period (2011-2015), Zeiske said he considered his company a perfect match as it is seeking to offer more choice and help to fuel consumption, especially of local products.
“If Chinese people have more money to spend, they will have a choice (of better quality products). And, as for Metro, we will be able to offer our professional customers more competitive products by providing differentiated solutions.”
At the end of last year, the company introduced a brand-new store format, “Metro for Horeca” (essentially smaller stores tailored to local needs) to meet the increasing demand from food professionals.
It also launched China’s first agricultural consultancy, Star Farm, in 2007 to control food quality directly at the source, and has helped to train farmers and agricultural companies in 15 provinces.
With its own traceability system, customers at Metro stores can discover where their food comes from, emphasizing food safety and giving them confidence in the goods they buy.
Last year, Metro Cash & Carry China saw sales rise 20 percent to a record 1.3 billion euros ($1.9 billion), accounting for approximately 1.5 percent of Metro Group’s global sales.
Metro’s sales in Asia and Africa registered growth of 17.3 percent in fiscal 2010 to reach 2.7 billion euros, with Metro Group’s global sales reaching 67.3 billion euros.
“We have a plan to maintain the pace, win more market share and grow faster than the market over the next five years in China,” said Zeiske.
Source: China Daily