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Tesco turns Chinese in Qingdao 乐购青岛走向本土化

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January 10 – Qingdao

Tesco, oddly enough, was the first supermarket I visited when I arrived in China in June 2008. The store inside the Luwan stadium was next to the block of serviced apartments where we stayed in our first month.

It was a dire store. The vegetables looked limp and old, the meat gave off a strange smell, the layout was indecipherable and no one seemed to be buying much. I quickly gave up on Tesco’s China strategy and never went back.

Until last weekend, when I arrived in Qingdao and saw the new Tesco hypermarket and the shopping centre that Tesco has built around it. It seems the supermarket giant has got serious. It invested £500 million (5.4 billion yuan) in China last year and plans to spend even more next year.

The money is going on a series of 23 giant shopping centres, some of which have blocks of apartments and cinemas attached. Tesco is going into the property development game (hohum, sometimes I think this is the only game to play in China). This way, it can have its pick of sites for its stores and lay them out a bit better than that store in Luwan (which is being renovated, apparently).

One Tesco executive tells me that they are opening four more shopping centres in the south in November, December, January and then February. The cinemas, in particular, should do well. “In the US, there is a cinema for every 400 people,” he says. “In China, there is one for every 180,000, so you can see there’s a growth potential”. The rush to open these stores is because WalMart and Carrefour are far ahead of Tesco.

The new Tesco store itself is impressive. It spans two floors and is laid out to focus on the core items that Chinese shoppers look out for: cooking oil, eggs, pork, toilet paper, rice etc. However, it also stocks a mind-boggling array of produce. Tesco says it has 2,000 suppliers for the store, who make 800 direct deliveries each week. The logistics of running that many suppliers is mind-boggling and Tesco is busy building distribution hubs so that it can mastermind its supplies better.

The “marketplace” is much cleaner than in the old Tesco, with fewer iffy smells, but retains all the chaos that Tesco insists makes Chinese shoppers happy. The store refers to the shouting and shoving as “theatre”. And there is one innovation that has come from Korea, apparently. A fine mist is constantly sprayed over the vegetables from overhead, making them look fresh and just out of the fridge. The system appears to have been rigged up, shanzhai-style, from a length of drainpipe painted green and I imagine it won’t be long before it is replicated across stores elsewhere.

The boss, Ken Towle, has a remarkable command of every price and every product he stocks. He discusses the elasticity of demand for eggs, which are sold loose in the store and sometimes decanted into plastic bags for customers who just want the liquid to take away. He says that a tiny fluctuation in the price of eggs can spark mad rushs. A 20 per cent price drop, he adds, would cause a stampede in store (the store is already packed out – the police restricted the entrances but around 60,000 shoppers were expected to pass through).

Meanwhile, the store has also reached out to the local community. Through the neighbourhood committees, Tesco invited locals to do their morning exercises in the forecourt, set up a CD player, handed out warm coats and also hot drinks. This sort of thoughtfulness costs nothing and generates a lot of goodwill.

It is early days, and Tesco clearly doesn’t have the guanxi in Qingdao to fill its shopping centre with the big name shops. Much of the mall looked like it had been filled with mom-and-pop shops that were happy to upgrade to shiny new premises. The only really recognisable Chinese brands on offer were Li Ning and Erke. It will be interesting to see if the bold strategy works though, and with the speed Tesco is expanding, it shouldn’t take long before the results are evident.









新店老板Ken Towle对每件货品和其价格都了如指掌。他和我们谈到了鸡蛋的弹性需求。鸡蛋在店里是散装卖的,有时甚至打散放到塑料袋里,给客户直接拎回家。他说鸡蛋价格的一点点波动就会造成疯狂的抢购。价格下降20%的话,甚至能导致店里的踩踏事件(当时超市里已经人满为患,有警卫守在门口,还有六万多人要进来)。




Written by malcolmmoore

January 13, 2010 at 7:29 pm

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The recent history of China’s foreign policy

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Gao Zhikai, or Victor Gao, was Deng Xiaoping’s old interpreter and sat in on some of China’s earliest encounters with the outside world, including the 1986 meeting between Deng and John Phelan, the then chairman of the NY stock exchange, during which Deng decided that China must have its own stock exchange.

Today, he is an executive director of the Beijing Private Equity Association and a director of the China National Association of International Studies, and has held positions with Morgan Stanley, PCCW and CNOOC.

But it was his early knowledge of Beijing’s interactions with the outside world that were most relevant for a piece about how Britain should handle its relationship with China.

In his view, China’s foreign policy history during the post-Mao period can be split into three periods:

1. 1978 to 1989: Deng Xiaoping’s opened up China to the outside world after decades of isolation. During this period, China’s tacit support for US policy helped bring about the end of the Soviet Union and the end of Communism in Europe. Mr Gao said China and the US were trading military and political information, and that the US was in the process of selling China helicopters and fighter-jet guidance technology.

2. 1989 to 2001: After the events in Tiananmen Square, the US turned its back on China. A UN resolution was passed against China and sanctions were imposed. No diplomatic meetings took place from 1989 to 1993, when Bill Clinton finally met Jiang Zemin on the fringes of the Apec conference in Seattle. “This was a sensitive and difficult time for China,” said Mr Gao, pointing out that with the Cold War over, China emerged as the next natural ideological enemy for the US, even though its brand of “communism” was a world away from Soviet marxism.

3. Post 2001: After the September 11 attacks, the US reconciled to China, aware that Beijing was a valuable ally in the war against terror, since (a) China has a Western border with Afghanistan and (b) China is not ideological at all, unlike, say Islamic fundamentalists. In addition, China’s admission to the WTO had helped push the country forward economically and given it an incentive to play a bigger role on the world stage.

Last year, said Mr Gao, was a major year of transition. A year in which China fully turned from introverted to outward-looking. The old policy of remaining a humble and non-speaking partner is finally dead and China expressed its position strongly at every international summit, from the G20 to Copenhagen.

Nevertheless, it is clear that there have to be some structural changes in the CCP bureaucracy before foreign policy is given the role it deserves. For their part, Hu Jintao and Wen Jiabao have travelled abroad to cement business ties, rather than to play the grand game of international diplomacy.

Mr Gao pointed out that the Foreign minister, Yang Jiechi, is not even in the enlarged politburo. “There are two to three dozen officials higher up that him, compared to the US, where the Secretary of State is number two or three”, he said.

高志凯(Victor Gao),曾任邓小平的翻译,陪同参与了中国最早期的一些外事活动,包括1986年邓小平与时任纽约证券交易所所长的John




1. 1978年到1989年,在相对闭关锁国几十年后,邓小平打开了中国和外界交流的通道。在此期间,中国对美国政策的默许支持帮助实现了苏联瓦解和欧洲共产主义的终结。高先生称中美当时交换军事和政治方面的消息,美国甚至准备向华出售直升机和战斗机的指导技术。

2. 1989年到2001年,天安门事件之后,美国冷淡了与中国的关系。联合国通过了制裁中国的决议,并予以实施。1989到1993年,中美之间没有外交往来,直到1993年克林顿和江泽民在西雅图召开的欧佩克会议上的会面。“这对中国来说是一段敏感而困难的时期”,高指出,随着冷战的结束,中国自然而然成为了美国下一个意识形态方面的敌人,尽管中国的“共产主义”和苏联的马克思主义相去甚远。

3. 2001年至今,911之后,美国向中国递出了橄榄枝,冀望中国成为反恐战争中的重要伙伴,原因有二,一是中国西部和阿富汗接壤,其二,中国并没有极端的意识形态,例如伊斯兰原教旨主义。此外,中国加入世贸组织之后,国内经济有所推进,自然在国际事务上想扮演更重要的角色。




Written by malcolmmoore

January 6, 2010 at 3:41 pm