Localisation is a term that sounds rather, well, global. Indeed, without the latter there would be none of the former. However, there is more to it than simply varying the menu in differing countries according to local tastes. In high-density areas that also command a large total population, and China’s cities are perfect in this regard, investment in logistics and supply chains becomes justifiable in oder to macro-localise offerings for the marketplace.
BHG operates six of its so-called lifestyle supermarkets in Nanjing, with more on the way. While five of the bunch could be described as very international in terms of their stock, the company has started to experiment with a more localised approach in its recently opened sixth outlet.
The roots of the brand’s macro-localisation lies in the history of the firm itself. An abbreviation for Beijing Hualian Group, these mini supermarkets have dotted the Chinese urban landscape for the past fifteen years. Much like their competitor, the oft-confused Lianhua, the no frills, keep overheads low approach worked well for a time but quickly lost traction as China developed and competition from the big international chains such as Auchan and Carrefour took hold. BHG took notice and planned their retaliation well; bringing in leading global information and measurement company Nielsen to conduct market research among the populace, including expats, well in advance of launching the subsidiary chain. The first store in Nanjing opened in Aqua City in 2009, and was an instant hit.
The BHG store in Raydu Mall in Jiangning District, on the other hand, opened much more recently. With high end fashion stores abounding all around, a Starbuck across the road and the British School of Nanjing around the corner, there is a never-ending flow of modern, youthful Chinese and expats through the branch that would not be out of place in central Europe.
Just 2 kilometres down the road is to be found the newest BHG location, on Liyuan Zhong Lu. In altogether more traditional Chinese urban surroundings near to residential communities, the BHG Lifestyle Market (note the name indicates the change in format from “The Market Place”) targets an altogether different market, through its selection of stock and inshore practices that are in some ways more akin to the Hualian supermarkets of a decade ago. Staff shout the day’s promotions into a megaphone while The Carpenters moan “Yesterday Once More” in the background. What has changed from the Hualian of old is the decor; all BHG outlets feature bright lighting, sensible aisle arrangement and pleasant decoration.
Just a few minutes later on the same day (The Nanjinger’s research was conducted on a Sunday morning) over in Raydu Mall, the in-store music is classical.
Yet, nowhere is the macro-localisation more obvious than in the alcoholic beverages sections.
In the Raydu Mall location, BHG carries only imported wines. In the Liyuan Zhong Lu store, Chinese wines make up 80 percent of the stock. Here, foreign beers are at a minimum yet they command an entire aisle in Raydu. Then there is the selection of Baijiu; here one finds the famed, garden-variety Erguotou, at ¥8. Over in Raydu, a bottle to share over dinner will set one back in the area of ¥400. According to a report by the U.S. Agricultural Trade Office in Beijing that dates back to 2011, “the staged approach [of the different store formats] was meant to establish the BHG name with middle-class consumers with the objective of eventually graduating them on to higher-end stores”.
Hyperbole it may be, but the same concept of macro-localisation though reformatting different stores has parallels with our very own Suguo. As one of Nanjing’s finest success stories, Suguo started life off as a little fruit shop; the name literally means Jiangsu Fruit. Now, the local business has grown into a giant, becoming a shopping store chain that spans several provinces with over 2,000 stores and and a workforce of more than 50,000. That part of the company’s implicit mission is to have a shop on every block (at least in Nanjing) has until recently been a hinderance to macro-localisation and attempts at brand differentiation through the creation of high-end stores.
Suguo now addresses this part of the market with the formats “Life’s So Good with SG” and the third generation of “Hao Di” stores called “Howdy SG”.
These high-end convenience stores with an emphasis on imported products (everything from liquor to coffee to shavers) as well as local everyday items such as milk, are focused on high-end consumers such as whitecollar workers and business people.
It is no surprise therefore, that Howdy SGs are mainly centred in core business areas in Xinjiekou and Gulou; four outlets have been opened to date, in the International Financial Centre, Hexi Wanda and the Zifeng Tower, while there is even one to be found in the now trendy basement of the prestigious Jinling Hotel.
Given their new luxurious surroundings, the need for macro-localisation has pushed Suguo to offer a stock that comprises 1,500 commodity varieties; there are 1,200 kinds of food, of which imports account for more than 50 percent. Shoppers will also find significant amounts of imported products in the non-food categories, particularly in hygiene, healthcare and makeup, while other beauty care products have been more recently introduced to the store.
Gone are also the check out assistants openly and loudly discussing intimate matters with their co-workers while ringing the cash register; the new Howdy SG is all about an integration of services and a better customer experience. Inside, all new store decor, lighting and shelf display all represent a stronger sense of a more stylish city.
In addition, lunch, sandwiches, sushi and other commodities are also new offerings, catapulting the Suguo convenience store into breakfast, lunch, and even the afternoon tea business. With Hong Kong based The Pacific Coffee Company, now rebranded as just Pacific Coffee under ownership of China Resources Group since 2010, signed up to provide their sub brand “VeryCoffee” in the third generation of convenience stores, 15 square metres of “dining area” chucked in for good measure and witness macro-localisation giving what was the domain of Starbucks a real run for its money. Throughout the next year, Suguo plans to open 30 Howdy SGs, along main thoroughfares and in business districts.
As convenience of an altogether different sort, the macro-localisation empire has also embraced the online era. Spare a thought for our cousins in Shanghai, where users of the popular app WeChat are being treated to a completely different mobile experience to those elsewhere. Having joined forces with the municipality’s government, WeChat’s creators Tencent were able to roll out a new “WeChat City Service” tab that offers users fourteen exclusive features, including the ability to obtain a hospital queue number (genius), pay utilities, check their driving penalty points and a whole lot more; even amazingly, the weather in different parts of the city. Now that’s macro-localisation.
This article was first published in The Nanjinger Magazine, May 2015 Issue. If you would like to read the whole magazine, please follow this link.
