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Thursday, July 19, 2007

What's on the shelves in China's Wal-Marts?

What's on the shelves in China's Wal-Marts?

Forget about the frozen food and bulk toilet paper. Wal-Mart shoppers here are more likely to find live crabs, 'black chicken' . . . and a blow-dry.

By Suzanne McGee, MSN Money

SHENZHEN -- In search of hairy crabs, pork-floss buns and compact towels that will dry easily in the open air, this southern boomtown's migrant workers and up-and-coming entrepreneurs flock to Wal-Mart's new Supercenter.

No longer do they go from one tiny storefront to the next, selecting vegetables at one and, at the next, a duck hanging from a hook above the sidewalk. Instead, they are discovering the concept of one-stop shopping.

"The produce here is clean; I know it doesn't have pesticides, and the quality is more reliable," says one middle-aged shopper, browsing through stacks of carefully wrapped organic Chinese greens. "Besides," the customer adds, "it's a joy to shop here."

This Supercenter opened its doors on the outskirts of Shenzhen just a year ago. Today it is bustling with customers. If Wal-Mart builds it, it seems, Chinese shoppers will come: This is Wal-Mart's fourth store in Shenzhen and one of 78 outlets the retailing giant operates in China, where sales growth hovers at nearly 30% annually, compared with a mere 2% or so in the United States, according to analysts. Shawn Gray, vice president of operations for Wal-Mart China, says the company is hunting for three more Supercenter sites in Shenzhen alone.

Chinese customers say Wal-Mart makes shopping for daily necessities downright pleasant. Worried about getting your goods home on a bicycle? No problem: Wal-Mart's shuttle buses travel up to three miles to ferry customers and their shopping bags. Wondering what to do with your grandchild while you stock up on groceries? There's a supervised children's playground available for a nominal cost, right next to the toy and book department.

But customers say it's what's on the shelves -- and the novelty of the shopping experience itself -- that brings them back to the store, sometimes as often as daily. Here, a look at what's in store.

Makeup and makeovers: After spending decades in look-alike padded jackets and boxy Mao suits, Chinese women have become fashion addicts. But many are still trying to figure out what styles suit them and which skin care and cosmetics products they should use. To help them out, Wal-Mart's cosmetics counters here are staffed with a team of "beauty technicians." "We tested taking them out, and our (cosmetics) sales dropped 40%," says Gray.

But Wal-Mart goes a step further. Just beside its cosmetics counters are rows of beauty-salon chairs in front of mirrors. For about $1.50, women can have their hair washed and blown dry into a style of their choice. And after paying for their purchases, they can arrange for additional services -- from manicures and pedicures to hair extensions -- with an entrepreneurial woman who offers her services through the store. "She has been a fantastic partner since the day we opened," Gray enthuses.

Portable closets, cots and chairs: Chinese homes are relatively tiny -- 750 square feet would be considered large -- so space is at a premium. That's why Wal-Mart stocks plenty of folding chairs. "Going into the holiday season, (shoppers) will purchase a lot of these for visiting family and friends," Gray says.

Closet space is almost nonexistent, so Wal-Mart offers zipper-front portable closets. And don't expect big multipacks of paper towels -- most homes are too small to stash extras.

One of Wal-Mart's compact best sellers? A folding cot that's a favorite with overworked executives who want to nap in their offices after lunch. The folding cots are relatively expensive at $12, but Wal-Mart is selling 40 a week.

LCD TVs: China's workers earn far less than their North American counterparts -- a salary of $300 a month makes you a consumer, and $1,000 a month puts you in the middle class -- but they are eager to spend on electronics, so Wal-Mart stocks dozens of the latest models of LCD TVs. Outside the store's front door, a Chinese manufacturer, Skyworth, has set up a festive tent, where salespeople use microphones to hype the rebate offered to any local citizen turning in an old-style TV, however decrepit, in exchange for a new Skyworth model.

"Black chicken" and instant "hot pots": In the ground-floor food department, most of the chicken breasts are charcoal-colored, the meat coming from a Chinese breed. "It is good for ladies' skin," explains the store's general manager, Stanley Liu. There is also more of this black chicken for sale than beef; the Chinese haven't developed much taste for beef, Liu explains, particularly in the south, where grazing land is almost nonexistent. Nor are they keen on frozen products. Aside from a few freezer cases stocked with dumplings and ice cream, virtually all the food on offer here is fresh. The Chinese version of a frozen lasagna? A package containing all the ingredients needed for a made-from-scratch hot pot, a common Chinese dish -- from the fresh pork and vegetables right down to the spice package. "Dump all that in the boiling water, you'll have a nice hot pot or pork soup," explains Gray.

But shoppers are coming to understand organics, particularly since the store began organizing bus tours to local organic farms. "It was so new, it helped explain the concept of chemical-free and organic," Gray said.

Live shrimp and hairy crabs. Chinese shoppers don't want to buy dead fish, even if impeccably displayed on beds of ice. They prefer to select their fish and seafood while it's still alive. That's why Wal-Mart's extensive fish section contains more fish tanks than display counters -- and small nets to bag your selection. Young shoppers are eager to help. "We come here every day; he likes to help select the fish," says one mother of her toddler son. The hairy crabs, a seasonal delicacy from Zhejiang province, cost a whopping $35 per pound -- but still sell well, Gray says. And a crowd surrounds the depleted shrimp tank, where shoppers avidly seek out the most aggressive and fastest-moving shrimp for their evening meal.

Tasting tea. Coffee giant Starbucks has made inroads in China, but at Wal-Mart, it's all about tea -- specifically, green tea, which consumers can sample before buying. "In China, we have a tea culture, and I get to learn about that while working here," says a young woman dressed in traditional Chinese robes. She swishes water through the tea leaves in an earthenware pot until the brew is just right. The tea is then decanted into a glass (sanitized after each customer has used it) for the customer to try. About two-thirds buy the tea they try, the associate says.

Pork floss and red-bean buns: Forget raisin bread and doughnuts. In China, favorite bakery treats include red-bean bread and pork-floss buns. Pork floss? It's basically dried and shredded meat, Gray explains. "They take a (pastry) or a bun, split the top and dip it in a kind of sweet mayonnaise, then dunk that into a container of the pork floss." Wal-Mart's bakers, and butchers, work behind glass windows, so shoppers can see them in action.

Safety lessons: Wal-Mart wants to give the Chinese consumer a total experience, whether it's offering a circle of toddlers lessons in road safety or good manners, or providing a picnic spot where customers can take their just-purchased takeout dinners (which include two meat dishes, rice and vegetable soup).

The goal? To capture a growing share of a market that exhibits more purchasing power with each passing year. "This is a great market," explains Gray. "The dormitories will be torn down and replaced with high-rise apartment buildings, and the income level of our customers will keep rising."

Published June 29, 2007

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