Research
Interview Synopsis

Aldi’s China launch & foreign supermarket chain dynamics

  • Multi-Asset Class
  • Consumer
  • Asia Except China

Speaking with a former senior general manager from the Chinese branch of Aldi Investment Co Ltd, Third Bridge Forum gained insights regarding foreign supermarket chains in China. The specialist explored strategies that have been employed historically, as well as Aldi’s strategic positioning and online sales performance

Click on the hyperlink below to access the full Forum transcript.

Aldi targets Chinese Mid-Range Consumers

The Interview began with a discussion on how foreign supermarket chains have developed in China over the past 10 years, the specialist then explained how they have interacted with and aided local Chinese retailers, and exemplified Walmart’s relationship with Tencent and Carrefour’s with JD Daojia. However, these relationships have increased the number of competent local players, which has consequently challenged foreign retailers to innovate in order to compete.

Turning to Aldi, the specialist explained why the retailer was targeting mid-to-high-end consumers in China when its model tended to be built on lower-priced but high quality private labels. She noted that private labels were still a relatively new concept in China. Although they were once seen as low quality, consumer views about them had started to change. As a result, the timing for Aldi could be auspicious.

The specialist explained Aldi’s decision for launching an online store on Tmall prior to opening any physical stores in China, and what the company had achieved in doing so. She outlined the similarities that Aldi’s initial strategies in China had with Costco, then continued by discussing how they differed, including the number of shopping decisions consumers must make in the different stores.

Although Aldi has taken great care in its market entrance within China, Chinese consumers by their very nature could pose a risk to Aldi’s performance. This is because consumers are more interested in trying new products as opposed to expressing brand loyalty. Despite this, she suggested that Aldi is hoping to promote a new attitude towards life, which could change consumer preferences.

Finally, the former manager outlined Aldi’s productivity, efficiency, branch businesses, and its relationship with Tencent, Alibaba, WeChat and Ele.me. She explained what this could mean for the traditional retail industry and supplying system, especially when coupled with new technologies.

To access all the human insights from Third Bridge’s Aldi’s China Launch & Foreign Supermarket Chain Dynamics Interview, click below to view the full transcript.

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The information used in compiling this document has been obtained by Third Bridge from experts participating in Forum Interviews. Third Bridge does not warrant the accuracy of the information and has not independently verified it. It should not be regarded as a trade recommendation or form the basis of any investment decision.

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