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Last Updated: Friday, 9 April, 2004, 14:32 GMT 15:32 UK
China's retail revolution

By Louisa Lim
BBC correspondent in Beijing

China supermarket shelves
More choice for Chinese shoppers
There used to be a time when shopping in China was an exercise in frustration
.

You wandered around large dusty state-run stores where sales assistants sipped tea and regarded customers with haughty disdain.

When you wanted to buy something you had to persuade one assistant to produce it, get a receipt from another, pay a third, and get another receipt proving you'd paid before returning to your original shop assistant, who was by now engrossed in her newspaper.

Now, just a few years later, the Chinese shopping experience is still frustrating, but in a totally different way. If you're visiting a Western-run store, even a simple visit to the supermarket is not for the faint-hearted.

The scale of these shops is extraordinary and the number of shoppers crammed into them mind-boggling.

Whole families clog the aisles debating the pros and cons of various products.

And if you want help in making your choices, forget it. In the cut-throat retail world where profit is king, shop assistants are few and far between.

Consumer crush

My first and only trip to the French retailer Carrefour unfolded like a slow motion nightmare.

I felt like I was on an endurance mission as I battled through crowds to the food counter. On my way I lost my cousin Tom and took three quarters of an hour to find him again as the shop was so enormous.

Then the queue for the checkouts was an hour long. I almost wept with relief when I finally left the store.

But Chinese shoppers don't seem to have the same response.

Carrefour opened its first Chinese outlet in 1995. Now it has more than 40 and plans to open ten a year.

Chinese retailers say they're paying the price. In Shanghai, traders say three big Chinese shops went bust after a Carrefour opened near them.

Despite restrictions aimed at protecting Chinese chains, foreign companies have built up a share of between 5% and 8% of the world's fastest-growing retail market in less than ten years.

Shopping mad

So why do Chinese consumers like Western stores so much? I asked Linda Shu from Ikea, another Chinese success story.

She described it as aspirational shopping, fuelled by clever ad campaigns. We tell people that if they buy small products they can change their lives step by step, she told me.

And it seems like Chinese consumers are buying not only the argument, but also the products that accessorise it.

Ikea has only two stores in China so far, one in Shanghai, and another in Beijing, but it plans to open ten stores by the end of the decade.

Linda Shu says she's noticed a huge contrast in consumer behaviour at its stores, with shoppers in Shanghai more picky and price-conscious than those in the capital.

And retail analysts warn that it's a mistake to think of China as one market. Each city is a separate market, with its own quirks.

China's potential markets are huge, and the success stories can be so dazzling that they drown out the tales of disappointment and failure, especially by small-scale Chinese retailers.

As always the allure of the China market gleams, but the reality doesn't necessarily live up to the hype.



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