M&S to focus on Beijing, Shanghai

Updated: 2015-03-03 06:54

By Wang Zhuoqiong(China Daily USA)

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British retailer will continue to invest in its existing stores

British retailer Marks & Spencer plans to open new stores in Beijing and Guangzhou beginning from 2015 and 2016, with a focus on developing in first-tier cities after its seven-year struggle mostly in second- and third-tier cities.

The retailer announced its intention to continue to invest in its existing stores, with the compete modernization of its outlet on Shanghai's West Nanjing Road this autumn.

The company decided to close five of its stores in Shanghai and surrounding areas by August 2015 and it has also reformed its head office resource structure in line with growth plans. The retailer, which opened its first store in the Chinese mainland in 2008, has more than 840 outlets in the United Kingdom and more than 480 in other countries and regions.

Its outlets in Changzhou and Wuxi in Jiangsu province will close next Monday, while further closures will take place by August at a further outlet in Changzhou, as well as in Shanghai and Wenzhou, Zhejiang province.

The company opened online stores on Tmall.com in January 2013 offering clothing and food products and an e-shop on JD.com in May 2014, driving up its sales on Tmall.com by more than 200 percent last year.

Meanwhile it has launched a new kidswear store on Tmall.com and a new clothing store on JD.com in January.

Shanghai resident Louise Cheung said: "For me, Marks & Spencer represents a British middle-class lifestyle as well as quality. It's a high-end retailer in China."

"I usually go there to buy groceries such as biscuits, tea bags and wine. I sometimes buy shoes there as they are more comfortable. Their apparel section is not as attractive to me and the sizes are often too large for Asians," she said.

Matthew Crabbe, Asia-Pacific director of research at Mintel China, a UK-headquartered marketing research agency, said that as M&S had been sourcing products in China for many years, it ought to have gained sufficient "local knowledge".

Therefore, its announcement that it is looking to open new stores in big cities such as Beijing and Guangzhou, where competition is already fierce, with a local partner because it needs to rely on local knowledge, shows that the company still has not got its strategy right.

He said: "Its stores continue to be very quiet when I have been to them, and it has had problems with local clothing sizing, and appealing to younger women." Also, the fact that it is considering closing stores in second-tier cities close to Shanghai is not encouraging, said Crabbe.

Crabbe said Marks & Spencer has never really defined itself well to Chinese consumers and it has failed to work out what its core market in China is, and how to appeal to those consumers. It also seems to have failed to get its store locations right and even its flagship store on Nanjing Road always seems relatively empty, which is a very expensive space not to have high footfall and sales, he said.

The food offering has always been restricted by limits as to what it can import, and so this does not give it a whole lot of scope to offer anything that cannot be obtained from elsewhere, given the number of high-end supermarkets now in cities like Shanghai, said Crabbe.

M&S appears to need, and be looking for, local help to give its China business a more positive direction. If this is what M&S is doing, then it has the opportunity to turn its business in China around, but it will have to think radically, move fast, and listen more carefully to its Chinese customers, said Crabbe.


M&S to focus on Beijing, Shanghai

Pedestrians walk past a Marks& Spencer shop in northwest London. The British retailer plans to open new stores in Beijing and Guangzhou in the near future. Reuters

M&S to focus on Beijing, Shanghai

(China Daily USA 03/03/2015 page15)