11 - Competition between foreign and Chinese retailers in China

Abstract

This chapter provides an overview of competition between foreign and Chinese retailers in China. As an industry, Chinese retailing was uncompetitive; however, that does not mean that Chinese retailers are not able to compete with MNRs. The case studies suggest that Chinese retailers are not only able to compete with MNRs but also outperform them in different ways. The Lianhua case suggests that Chinese retailers can increase their core competencies and grow fast by using the right strategies, particularly the alliance strategy taking advantage of various kinds of resources. The Vanguard case suggests that Chinese retailers can win the competition with foreign retail giants by their innovations. The Suguo case suggests that Chinese retailers can also succeed by avoiding direct competition with foreign retail giants and concentrating on the vast rural market. Facing the World Trade Organization (WTO), both Chinese retailers and MNRs would meet challenges and opportunities that they never met before. Chinese retailing had great potential to catch-up on the eve of the WTO. If Chinese retailing can take advantage of the WTO and its own local advantages, it is completely possible for them to catch up. Chinese retailing was standing at the critical moment in its history on the eve of the WTO.