7-Eleven eyes on Shanghai Market

By Anita Shen
FranChina

As Shanghai convenience retailing wards of the shade of revenue deficit, long wandering 7-Eleven is expected to enter the market next year. However, for its late coming, the 'entrance fee' of a wholly-owned outlet is accordingly much higher. In this case, 7-Eleven will give up the idea of starting up from bear ground but to adopt a model of money fund operation.

In 2004, 22% convenience stores out of 4131 in Shanghai have generated profits in on-going business, which is regarded as a milestone of convenience retailing in Shanghai and Shanghai is now at a turning point in retailing sector.

During 2002 and 2003, convenience stores in Shanghai were boomed door-to-door, side-by-side as enclosure of land. On the contrary, the expansion rate of convenience store experiences the lowest point in the following year, but the business of each store runs well and turns out its uniqueness.

As convenience retailing grows even mutual, Shanghai convenience stores no longer engage in price war but manage to make out its own way out. The diversification of goods and first-class services creates a new horizon and makes them survive the increasing competition in the market. In 2005, stores that reach 10 thousand of average sales revenue have risen by approximately 30%.

As the new member joining in the game, the business atmosphere in Shanghai becomes even severe. If one wants to make a successful business, he should add more importance on the goods and services, which would make them outstanding among others. Nowadays, specialization and relentless innovation is the competitive edge of dealers, on which the future of convenience retailing in Shanghai should rely. However, there is still a long way to go.