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China: Chinese retailers exploring German discount retail

The recent visit of 30 prominent Chinese retailers to Germany was a valuable opportunity to gain a deeper understanding of the discounter model that has yet to fully take root in China's grocery sector. During the intensive workshop led by ILPL and DRC, these top-tier Chinese retailers, with a combined network of over 30,000 stores, were immersed in the insights and evolution of the discount retail model in its birthplace, Germany. The workshop delved into the start-up and growth strategies of discounters, as well as the pivotal role of private label development in the discounter business. This was followed by a first-hand experience visiting the warehouse of a leading European discounter and touring their retail stores, providing the Chinese delegation with a comprehensive overview of the discounter's operational model and its ongoing advancements. Given the enthusiasm expressed by the participants, it is clear that the discounter concept holds significant potential for future implementation within the Chinese grocery landscape, which remains largely untapped compared to the more established discounter presence in the European market.


Workshop on Discount Retail in Germany

The one-day workshop on the start-up and growth of the discount retail industry in Germany provided the Chinese delegation with a comprehensive understanding of this unique business model. The participants were particularly intrigued by the rapid expansion of discount chains and the critical role of private label development in driving their success. The detailed presentations and lively discussions covered the key factors behind the discounters' ability to offer high-quality products at consistently low prices, including their streamlined operations, efficient supply chains, and strong relationships with suppliers. The Chinese retailers left the workshop eager to explore how they could adapt these strategies to their own rapidly evolving market, recognizing the immense potential for discount retail to transform the grocery landscape in China.


Warehouse and Store Visits

The group of Chinese retailers were eager to delve deep into the operations of a leading European discounter, eager to uncover the secrets behind the success of the discount model. The visit to the state-of-the-art warehouse facility provided an eye-opening experience, showcasing the efficient logistics and streamlined processes that enable the discounter to maintain low prices and high availability. Navigating the vast aisles and observing the meticulous inventory management was a revelation, leaving the visitors with a newfound appreciation for the complexities of the discounter business model. The subsequent store visits further cemented their understanding, as they witnessed first-hand the customer-centric approach, the emphasis on private label offerings, and the relentless focus on value that has made the European discounter a formidable player in the highly competitive retail landscape. This immersive experience has undoubtedly piqued the interest of the Chinese participants, setting the stage for the potential adoption and adaptation of the discount model in their own market.


Potential for Discount Retail in China

The Chinese grocery retail landscape has yet to fully embrace the discount retail model, but the potential is undeniably vast. The recent ILPL - DRC-organized visits and workshops have generated tremendous enthusiasm among the 30 top Chinese retailers, who collectively operate over 30,000 stores across the country. These participants were enthralled by the in-depth exposure to the business model and developments in the discount retail industry, particularly in the cradle of discount Germany. The workshop sessions on the start-up and growth of discount retailers, as well as the insights into private label development, have clearly piqued the interest of these influential Chinese players. With the discounter concept still largely untapped in the Chinese market, the stage is set for this innovative retail approach to make significant inroads in the near future.


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