Hypermarkets Capture Grocery Share in Shanghai

The hypermarket format is taking hold here thanks to competitive pricing and merchandising that replicates traditional Asian open-air markets. According to a study last year by TNS Global, hypermarkets in this eastern Chinese coastal city now account for about 45% of the grocery market, the most hypermarket-dense metropolis in the country. Overall, hypermarkets in China still have

SHANGHAI, China — The hypermarket format is taking hold here thanks to competitive pricing and merchandising that replicates traditional Asian open-air markets.

According to a study last year by TNS Global, hypermarkets in this eastern Chinese coastal city now account for about 45% of the grocery market, the most hypermarket-dense metropolis in the country. Overall, hypermarkets in China still have plenty of room to grow in second- and third-tier cities, according to the report.

“The fact that even the market leader does not command a share above 5% reflects the current fragmented nature of the grocery trade,” said Jason Yu, regional account development director, TNS Worldpanel, in the report. “At the same time, it points to significant market opportunity arising from future market consolidation, which we believe will be inevitable.”

Recent observations here by SN of hypermarkets operated by Lotus and Carrefour — which recently opened its 100th hypermarket in China — indicate that the stores emulate traditional Asian shopping culture, featuring live seafood products butchered to order and large open bins of vegetables and rice. Poultry, pork and beef are displayed pre-butchered and partially butchered in self-service bins.

Prepared foods popular in the region, such as fried dumplings, are also merchandised street-kiosk-style in some of the hypermarkets.

The stores, measuring 75,000 square feet or more, generally feature a full grocery offering on the lower level, including both perishables and dry consumables, connected by a long escalator — actually a moving ramp that easily accommodates shopping carts — to a second floor containing clothing, appliances and housewares. Some stores visited by SN also merchandised bicycles and motorbikes on the second floor.