Chinese Marketplace: What would be Targets closest competitor in China if they decided to enter into China?

[MarketingStudent]

Doing a market entry project in class. Trying to decide what Target's (The store) highest competitors would be in China. Opinions? Open to any suggestions.

 

Also, do you know how people within the chinese culture would perceive the red bullseye 'target' associated with Target.

[tytzer]

I can't really comment on that since I've never been to the US nor Target's (Although I have heard about it).. The closest competition I can safely say in China is Carrefour.. 家乐福(JiaLeFu)

[ouyangjun]

Taobao...  

[msittig]

A couple others besides Carrefour: Walmart, 大润发 （RT-Mart), possibly 乐购 (Tesco).

[Demonic_Duck]

Huh? China has Tesco?

 

Also Wu Mart 物美.

[ouyangjun]

@Demonic Duck - yep.  At least in Shanghai / Suzhou area.  They also have a Sam's Club 山姆会员, which is another Wal-Mart company.

[Xiao Kui]

I'm skeptical of how well Target would do in China. Even in America I scarcely bump into mainland Chinese immigrants in Target because Walmart has the same stuff cheaper. I run into mainland Chinese at Walmart and Aldi pretty regularly.

[ouyangjun]

Re #7:  I think it would all depend on how they adapted their business model to the China market.  Take a look at Best Buy back when they tried to enter the China market.  Their business model was not setup to thrive in China and they failed.  They were offering the same products that local competitors were offering, but their prices were more expensive.  The local consumers did not see the value to pay a premium to shop at Best Buy.   If Target came here and started selling the same things as Walmart and Carrefour but was selling at a premium then I don't think they'd be successful in China.  They'd have to find a way to differentiate themselves from the competitors that are on a pricing tier below them.

 

Take a look at Apple, they do great business at the flagship Apple store in Shanghai and other parts of the country.  They offer a product that is differentiated, one that you cannot get elsewhere (unless via a black-market).  The Chinese have been willing to pay the premium for Apple products.  So it is not that the mainland Chinese consumers are "cheap", it is that the majority are not going to pay a higher price for the exact same product you can get elsewhere.  

 

So the question to me would be what could Target do to differentiate themselves in the market that would allow the Chinese consumers to accept a premium...

[gato]

Apple has its own branded (high-end) products. It's a completely different business from Target. Apple's business model is more like the Louis Vuitton and Burberry stores that are wildly successful in China. In fact, Burberry's former CEO just joined Apple recently to take over the management of Apple Stores.

Aside from Carrefour (which entered the China market very early and had the hypermarket sector all to itself for many year), the foreign stores that have been successful in China all have their own branded products that are a cut above the products of their local competitors. Foreign companies are best off going after the upper-middle class market, which is already sizable at about 100 million consumers, i.e., the top 10%. They don't have a competitive advantage competing with local companies for the mid-tier and lower end of the market.

Some other examples of very successful foreign retail businesses in China: Starbucks, Pizza Hut, H&M, and Uniqlo.

[MarketingStudent]

Thank you for all of your replies it has been very very very helpful!! I appreciate it!