The term chaotic is defined as being in a state of complete confusion or disorder. To me this simply sounds like every day life. The world revolves in a seemingly spontaneous, chaotic manner, yet it’s measured, guided and traversed by human beings. We are able to harness this chaos through the creation of social systems and structures.

After 24 years of life on this earth my social observations are more and more articulated and fine-tuned as I place situations into an analytical frame. The images, events, actions, dynamics, and interactions still ping-pong in a random chaotic state, yet I’m able to at least partially understand each situation and interpret the meaning at hand.

Imagine if this chaos did not exist in everyday life. Each day follows the same pattern, same interactions, same food, same smells, same same. Would Earth still exist as we know it today? Would culture thrive, build, and conquer? Earth would be a boring repetitive spinning top that never stops.

Chaos is absolutely necessary in research. It creates the unique social dynamics that we observe and analyze on a daily basis. Without chaos, I would not have a job, nor be writing this sentence. This is important to keep in mind when selecting the proper research methods to employ in your research design. It’s all fun and games to employ methods that attempt to remove the necessary structures and systems in place for data gathering, yet exacerbating chaos is like removing one side of your analytical frame, and the things inside begin spewing into other frames, skewing your data and your results. It can be messy and inefficient.

Harnessing this concept of research chaos is a skill I’m still attempting to master. Balancing innovative research with systematic dryness is definitely not a task that I claim expertise over. However, as I place more and more social situations into manageable frames of chaos, it becomes easier and easier to creatively uncover data.

Over the past 3 months, core members of the enovate insights team were immersed in a research project investigating the RC Hobby community in Shanghai. This community is a tight-knit group of passionate tinkerers and adventure-seeking garage dwellers spanning all ages and demographics. In our research findings, we noticed a key pattern across most high-level RC Hobby enthusiasts: a strong passion for all things photography.

It’s common to conjure images of the stereotypical Chinese man, traveling with his trusty Canon strapped around his neck, carefully directing his family to the precise spot for the perfect picture. We’re not here to erase that image (as any tourist destination in China upholds this). However, after analyzing findings pertaining to this extremely niche category of RC Hobbies, the parallel affection for photography leads us to another question: What factors enable photography to act as a “gateway hobby”? And what exactly is a “gateway hobby”?

A gateway hobby is simple to understand. Interest in one particular hobby (i.e. Photography), ultimately leads to a more passionate and fulfilling interest (i.e. RC Hobbies). So why is photography such a strong protagonist in developing further and more defined personal interests? Let’s examine further.

1. Photography has sustainable cultures and communities, both online and offline.

Photography has a way of transcending style, geekery, hipsterdom, career and casual. Its role and use among each of its different types of users creates many separate cultures and communities, online and offline.

A pass through the camera groups on popular Chinese youth social networking site, Douban.com illustrates the diverse camera passions of its members. There are Lomography groups with thousands of members, Lieca groups with thousands more, groups dedicated to old-school Chinese Seagull cameras, and groups centered on the latest and greatest camera technology. Each group acts as a hub for camera and general photography discussion, lined with the connotations and individual make-up of each type of camera user.

2. Photography is more than a simple “point and click”.

Though digital cameras, multi-functional camera phones, and instant photo sharing are the photography industry’s Edisonial lightbulb moment, the fact still exists that photography is more about the pleasure of interacting with photos taken through editing, manipulating, sharing, and displaying online and offline.

A photograph is a thin waif of nothingness. However what’s displayed on that nothingness is a lasting memory, a visual experience with details, colors and objects. It’s a story mixed with emotion and narrative.

Chinese youth interact with photographs by creating artistic displays, sharing with friends on Weibo or a personal blog, editing for humorous effect on Photoshop and disseminating on BBS’, and most importantly, use photography as means of exploring nuances and intricacies of other passions.

Another great example in this category is the Chinese youth led company, fanfancan. fanfancan is a photographic publishing company bringing to life your photos in physical and shareable booklets. They embody the strong emotional appeal physical photos can bring to other people.

3. Photography creates new opportunities to see beyond what’s in front of you.

We were seated on the back of a bus filled with young Chinese strangers, eager to travel to the outskirts of Shanghai for a night walking excursion. Photographs were snapped at every opportunity, bringing together complete strangers and creating new friends. The purpose of this trip was not for photographic exploration, but for making new friends and general adventuring. However, the presence of cameras created an initial icebreaker for shy individuals.

The brilliance of photography is that those interested create opportunities and excuses to take photos. Night journey’s in a Shanghai water town, architectural tours of an old Chinese city, strolling streets to find hip Chinese fashionistas, cataloguing minute RC Hobby parts to share in online forums; these are all passion areas enhanced by photography. This leads back to the main point at hand: photography is a gateway, a lens through which these other passions and interests are magnified, stored, and shared.

Photography is a common bond that users all over the world adhere to. Each photographer seeks to capture their own unique glimpse of the world. In China, the lens zooms further forward.

Analyzing fashion trends in China is a complex task. What is one of our methods you ask? Well, let’s first take a look back…

Over a year ago, we created our first street team in Shanghai. Our Shanghai street team consists of three to four Chinese youth college students, selected for their passion and dedication to fashion and research. Their task is to head out into the streets of Shanghai every week and capture both the existing fashion styles as well as the unique voices of the Chinese youth. From this initial endeavor, we have expanded our street teams into the cities of Hangzhou and Chongqing and anticipate future street teams in Guangzhou, Beijing, and Chengdu over the next year.

From our street team’s keen fashion eye and our existing Chinese youth cultural knowledge, we are proud to present our 2010-2011 Chinese Youth Fashion Trends Report. The goal of this report is to inspire designers, creatives, marketers, researchers, or those simply interested in modern Chinese fashion, and create cultural contexts and moods surrounding Chinese youth fashion today.

Another purpose of this report is to leave the reader wanting more. It’s impossible to fit every trend, insight and analysis into a report of this structure, so we sincerely hope those interested in diving deeper into the Chinese youth fashion mindset contact us at info(at)enovatechina.com for business or press related inquiries. Any additional comments can be left in the comment section.

We recommend viewing this report in PDF format. To download this report, please click here for a free PDF.

Thus, we’ve set our top Chinese voice, Beibei, into the rapid-fire Sina Weibo world to capture hot Weibo topics and to provide an enovate Chinese voice in this youth dominated platform. We’re excited to present this new weekly addition to our website. We hope you enjoy!

1. The Ethan Ruan Effect

Ethan Ruan, a Taiwanese actor and model, is apparently the most popular male celebrity in China right now. Why is this the case? Well let me tell you. This past week when he was leaving the HK international airport, one of his fans was so excited, she peed her pants while waiting to see him! Outrageous!

Last week he was also one of top five topics at Sina Twitter. People “Weibo’ed” (“Weibo” is also a verb, much like “Twitter” in English) anything and everything about him:

Basically he’s young, handsome, trendy, love sports, in great shape, and every girl’s “dream guy”! Celebrity gossip seems to dominate the Weibo airwaves at the moment, check for item number 5 to see who the guys on Weibo are buzzing about.

2. KFC ‘s “Miao Sha Gate”

The term “Miao Sha” stems from a past online gaming term, known in English as “SecKill”, and occurs when you defeat your enemy in a matter of seconds. In the context of KFC, it refers to the quick sale of it’s promotional products.

KFC’s “Miao Sha Gate” spread across Weibo as China learned of KFC’s cancelation of a “Miao sha” promotional activity on the KFC Taobao website. KFC claimed that some customers had created fake chicken giveaway online coupons. Angry Chinese customers who were trying to use real coupons at the store and were refused, became enraged and began ordering McDonald’s delivery to express their disdain. After severe online and Weibo backlash, KFC issued an apology on April 12th for the online coupons and retorted that this is a good lesson for them to gain experience for future online campaigns as well as online safety issues.

3. Chinese Girls Believe “Connection” is the Key For A Good Life

Weibo was in a tizzy this week regarding a recent survey amongst Chinese college girls carried out by the Women‘s Federation of Guangzhou that shows 59.2% of college girls in Guangzhou want to marry a member of China’s “Nouveau Riches”. Why? The Chinese girls feel it offers more of a comfortable life and less personal struggle. 40% of those surveyed want to marry “iron bowls” for a stable life. 10% of the girls said they only care to love one person in their entire life. Additionally 60% of the girls are anxious about their future, while 37.7% of them think connection is the most important for changing their life. 25.7% think luck is most important. Marriage, personal performance good looks round out the rest of the poll.

4. I “Heart” U: A Great Unintentional Nike Commercial!

This picture was “Weibo’ed” over 200,000 times on Sina and Kaixin001! A young Chinese guy made this as a gift for his girlfriend of over 3 years. It was so cute and creative, her heart must have melted! Plus what a great free commercial for Nike!

5. “Aoi Sola, Do You Want to Come Over Tonight?”

This last one is more Twitter related, however it’s popularity spread over into the Sina Weibo realm. On April 11th, famous Japanese AV girl, Aoi Sola, was found on Twitter by Chinese netizens. Since this amazing discovery, over 15000 Chinese Twitterer’s employed their “Fan Qiang” skills (which literally means, “climb the wall” but in netizen speak translates to “Navigate around China’s Great Firewall”) to get on Twitter and follow her. Of course most of these are Chinese “Zhai Nan” (or Nerdy, loner guys), someone even tweeted: “Aoi Sola, do you want to come over tonight?”

The interesting thing about these hot topic is that it’s attracting more and more people to actively seek out proxy’s to “Fan Qiang”.

Check back next week for another addition of Beibei’s Sina Weibo Round-up!

It might be closer than you think.

China Mobile is taking a bold step into this potentially lucrative market by working both with phone companies and content distributors to bring the world of television to mobile phones. Their initial target of 5 million is modest at best compared to China’s total population, but it’s a target that’s sure to grow larger as 3G capabilities and higher mobile technology permeate China’s lesser populated landscape.

The implications for a widespread mobile broadcasting platform in China are as potentially large and lucrative as the amount of post-comma zeros residing on the heavy checks set to line pockets of drooling advertisers everywhere.

In other words, massive.

In a recent off-hand conversation with one of our global advertising associates, our discussion veered into the possibility of conducting more ambitious advertising campaigns through other mediums than television. To boil down the conversation, essentially this barrier has yet to be broken in China (on a large scale). As global advertising companies seek to be in China, the advertising landscape is wholly dominated by television.

So whose thumb is keeping the mobile broadcasting dam from bursting?

1. The Consumer.

The first barrier to mobile broadcasting adoption is most obviously, the consumer. Adoption rates of this technology are currently set at low estimates (China Mobile’s aforementioned 5 million comes to mind). Consumers need to want mobile broadcasting, but for now, there’s little demand amongst Chinese consumers.

2. The Technology.

Mobile 3G technology makes for faster mobile internet use. The adoption of this technology amongst cell phone makers, providers, and consumers is critical for the state of mobile broadcasting to advance. There are signs that this is increasing. GFK analyst Pang Jun estimates that the year 2010 could see the number of people accessing 3G services in China rise to 170 million. As mobile plans decrease in price, 3G infrastructure becomes more developed and/or consumers find local-level 3G shanzhai alternatives, 100% 3G adoption is inevitable.

3. The Television and Its Spurious Chinese Entities.

As much as we enjoy pointing to innovative trends, it sometimes has little relevance to the mass consumer market. Television is a clear indicator of this factoid. China still has over 395 million TV households and the capability to reach 95% of its 1.3billion population. Why would a person sitting at home choose his or her mobile phone over a quick flick of the television remote? A tough sell.

Additionally, China’s television content is still very much in an evolutionary state. China’s television content is either moderated by government officials, influenced by global television shows and then poorly localized, or simply just not interesting enough to captivate a young person’s attention span. As creativity and original content develop into actual watchable shows, mobile broadcasting will also reap the benefits.

I would enjoy leaving our readers with a victorious chant, shouting, “NO MORE TELEVISION, MOBILE CONTENT IS KING”, but this would prove to be unjustly false.

Television is still king in China, this is a fact that will not change for many years. However, mobile broadcasting is the small rat sneaking around in the kitchen looking for a nibble of cheese.

Imagine the most powerful, transformative, and socially accepted consumer category in modern China. The Internet? Perhaps. Online social networks? A capable choice. Add cutting edge, hand-held, untethered technology to those former categories and the power of Mobile now becomes more clear. Undoubtedly, mobile technology, either in the form of cellular phones, handheld portable gaming devices, MP3/MP4 devices, e-readers, even multi-functional cameras comes to mind as THE tool of modern Chinese society.

Our aims these next few weeks on the enovate broadcast system are to shed light into the multitude of habits, usage, technology, and surrounding social communicative nature of mobile devices that turn youth pockets into beacons of information and entertainment.

We’ll be investigating specific trends, gathering insights and crafting analysis to help you better understand China’s mobile landscape.

Feel free in the comments section to pose questions or propose topics that specifically pique your interest, and we will incorporate your perspectives into our bi-weekly theme research.

We would like to thank our like-minded friends at Greennovate, the sustainability consultancy, for their support and dedication throughout the entire project. Look out for future enovate and Greennovate partnerships in the near future!

Recent Survey of Over 400 Chinese Youth Indicates a Desire for Healthier, More Environmentally-Conscious Lifestyle

Greennovate and enovate team up to conduct the first-ever youth-focused environmental study in China

SHANGHAI, March 2010: Two Shanghai-based organizations – the sustainability consultancy Greennovate and the youth-insights group enovate – cooperated to gather insights into the minds of China’s socially aware, progressive youth. This is the first nation-wide survey of youth attitudes towards Chinese environmental issues and awareness.

Through an online survey of over 400 students and young employees from around China (72% of whom live outside Shanghai) and additional in-depth interviews in Shanghai, Greennovate and enovate sought to discover what defines a modern quality of life for Chinese youth in 2010 as well as attitudes and perceptions towards green products and brands.

The survey was conducted as a part of MaGiC (Made GREEN in China – www.joinmagic.org), an open initiative of Greennovate to encourage the development of greener products and lifestyles in China. MaGiC, which is also supported by enovate, includes a Chinese youth green design competition and public green events at major Chinese universities, helping to build public awareness on Chinese sustainability. MaGiC has reached over 700 university students from 3 cities around China so far.

When asked to select the quality of life factors that are most important in their lives, personal health and education were most often chosen by Chinese youth. This represents a shift in the values of Chinese youth to a more idealistic, attainable, and personally beneficial lifestyle, rather than one that is fast-paced and spendthrift with the goal of improving material wealth. Owning a personal automobile and living a big city – though common goals of China’s mass youth population – were ranked the least important among China’s leading progressive and socially aware youth.

Enovate founder and director John Solomon commented, “This shift in values amongst Chinese youth was one of our top Chinese youth trends in 2009 based on this survey and other client related projects. Brands will continue to be under pressure to align with relevant youth causes, especially those that address China’s ongoing environmental issues.

The survey also revealed a demand from Chinese youth for “green” brands to prove their “greenism” through products, not just marketing – with 58% of participants verifying green product claims online and expressing a lack of easy indicators for consumers of which products are truly “green.”

Building trust through transparency is essential for brands. Greennovate director Mihela Hladin explains, “The survey supports our efforts and positive approach towards green momentum in China. It has revealed a market share potential for businesses and products with a lower environmental impact. Consumer expectations and perceptions will raise the bar on brand transparency and honesty, with social media playing a crucial role in building consumer understanding of sustainability and providing resources for additional information.”

The survey indicated that Chinese youth reward green brands through word-of-mouth (both online and in person), involvement in community initiatives, and increased sales. Brands and companies can look to these results as leading indicators for more popular social trends in years to come.

To download a full PDF version of the report, please click here.

CHINA CONSUMER INSIGHTS AND STRATEGY FIRM, ENOVATE, RELEASES TOP 2010 CHINA EMERGING CONSUMER TRENDS IN THE YEAR OF THE TIGER

Over 60% of Emerging Consumers Prefer International Brands that Localize their Products to the China Market

enovate, a China focused consumer insights and strategy firm, released its 2010 China Emerging Consumer Trends report today, which includes over 30 trends.

80% of rich Chinese consumers are under the age of 45, compared with 30% in the US and 19% in Japan. The sheer size and spending power of this consumer group in China, combined with the relatively mild impact of the global recession on the country, is causing foreign brands to salivate over the potential upsides of this market.

enovate’s report reveals specific China youth trend insights that were gained through enovate’s close interactions (direct market research, social media participation, trend analyses) in China. with China’s emerging consumer (15-30 years old) segment.

As many brands and businesses already know, China’s youth consumer group is different than any other in the world. In order to win over this groups’ hearts and command attention, brands need a deep understanding of this groups’ hopes, habits, dreams and desires.

enovate’s 2010 trend report highlight key trends affecting China’s emerging consumer class in areas related to China technology, China society, China’s regions, China media, China marketing and branding preferences and habits that provide guidance for any brand or business targeting this growing market.

The report includes three key emerging Chinese consumer trends:

Youth Still Crave International Brands but Want It Their Way — Will This Be Exported Back Out of China?

The emerging consumer is still hungry for foreign brands, but this consumer is becoming deferential to global brands that develop products to local tastes and preferences. In a recent enovate survey, a majority of Chinese emerging consumer respondents (over 60%) indicated that they preferred foreign brands with localized designs over local brands or foreign brands with no localization. This is driving an interesting phenomenon–brand innovation within the China market.

Brands like Pizza Hut, New Balance, and Buick are all taking measures to differentiate their brands in the China market. New Balance, as a late entrant into the game, needed to make a quick impact with its target consumer and so invested in product and retail innovations specifically for the China market. These developments are now being rolled out globally by New Balance headquarters back in Boston. Could the strength of the emerging Chinese market in China affect global trends?

Online and Offline Interactions Amongst Chinese Youth Expanding While Also Fragmenting.

For 2010′s Chinese youth, there is a proliferation of technology that continues to bridge the gap between China’s online and offline social networks. China Social networks such as Douban establish online pages that promote offline social gatherings. These are categorized by cities and are a popular way for young Chinese to make new friends and expand their social network. Offline groups are also gathering in China to participate in group shopping, or in Chinese “Tuan Gou”. It is also important to keep an eye on up and coming players such as P1.cn and moko.cc.

Multi-versatile and Integrated Companies, Technology and Media.

Online Chinese youth consumers are extremely turned off to advertising that is “e-su”, instead preferring advertisements that are fully integrated engaging, creative, and displayed across both traditional and online channels. Technologies such as cell-phones and PSP’s are becoming increasingly versatile and multi-functional for youth users as well, due to an “always online and in touch” virtual generation. Chinese youth must be able to communicate, play games, read books, shop, etc. all from the convenience of their cell phones or PSP’s. The key to success in 2010 and onwards will be how well brands use an integrated approach to their campaigns and brand touch points.

enovate Director John Solomon commented,

“We are actively following brand innovation in China. We believe the outcomes of brand differentiation in China will lead to China exporting innovation. I predict in the near future a China trend could become your markets’ next trend.”

Solomon continued,

“On the online front, we predict that we will see a proliferation of niche social networks in 2010, with networks and Chinese youth cultures becoming more fragmented and specialized. Websites like P1 and 360Quan cater to sects of niche cultures, yet are highly influential online communities to target.”

enovate collaborated with global trend agencies as a founding member of the recently launched global Youth Research Partners to undertake this report. This report, while China focused, is also applicable to emerging consumers worldwide.

For a sample of our report, feel free to view the following teaser slideshare. The full report contains over 30 Chinese emerging consumer trends and insights.

Enter your information here to receive a copy of the full enovate 2010 China Emerging Consumer Trends Report! For any additional questions or business inquiries please contact info@enovatechina.com

(photo credit, tokyocraiger)

Shanghai has long been a city where civil initiatives are often filled with bicycle focused suggestions and solutions. In the year 2010, it’s difficult to see any bicycle friendly implementations in a city littered with construction signs and clogged roads, mired in an unprecedented Expo frenzy.

There is hope however, and it comes from one of Shanghai’s oldest bicycle brands: Shanghai Forever Bicycle Company.

In the year 2008, as the patches of industrial buildings and residential houses along the Huangpu River had yet to be removed to make room for Haibao and his crew of merry workers, Forever set in motion its grand plan to integrate a comprehensive bike rental system along Shanghai’s streets. Mirroring successful bike rental platforms in Paris and Hangzhou, Forever took a small step into this foray with the introduction of a solitary rental system in Pudong’s Zhangjiang High Technology Park. Located directly next to the subway station, this bike rental system is meant to appeal to workers seeking transportation between the Subway and their final destination. Often the highest necessity for those lacking proper transportation, this last stage, referred to by city traffic planners and Xu Xuefeng, a Shanghai People’s Congress delegate, as “the very last three kilometers [between homes, schools, or communities to traffic hubs]“, is the most critical spot to place bike rental systems as this offers the most convenient and largest opportunity for adoption by potential rental bike users.

Following a recent string of bike related government initiatives, including a free bike trials in Shanghai’s Minhang district, and a focus to add more bike lanes in these “last three kilometers”, Forever’s bike rental system represents an ambitious plan to show off a modern Chinese biking society during the May 2010 Shanghai Expo. Currently in one of China’s most central districts, Xuhui, there are nine such rental bike ‘hot-spots”. A representative from Forever indicates that in Xuhui alone, there will be 40 or more of these bike rental “hot-spots” by the time the Shanghai Expo begins. However, by 2012, Forever hopes to have more than 3500 bike rental “hot-spots” spread across Shanghai’s vast city landscape at a cost of over 400 million yuan.

Forever’s commitment in this endeavor is not only for increased brand exposure and the promotion of bike culture in Shanghai; Forever also hopes to reduce motor vehicle emissions as well as provide the “healthiest capillary vessel” in Shanghai’s ever growing Public Transportation system. It also may be one of Shanghai’s most technologically advanced. Access to the bike rental service can be arranged by purchasing a RFID “bike credit card” for 200RMB that gives each user 100 “rider credits”. As riders return their bikes within certain pre-determined time frames, points are either deducted or added based on these times. The service is accessible for both locals and non-China natives; a government issued ID card, or passport is required to purchase the “bike credit card”. This attaches direct accountability for the bike and will hopefully deter thefts.

We’ve recently spoken with many local bike shops, riders, and city planning experts regarding bike rental systems and the consensus indicates that for Shanghai to successfully implement a system like this, it must keep in mind two things: accurately distanced rental stations based on usability and proximity to buses and subways, as well as proper government funding and attention. Essentially this cannot be a half-assed effort or it’s adoption rate will be low and over 400million RMB is simply thrown away.

The adoption rate among youth Bike riders is also a question of debate. 22 year old enoVate team member, Jermaine Chen, appreciates the program and it’s opportunities for environmental benefits as well as solving many people’s “last three kilometer” problems. Recent enoVate bike research also indicates that Shanghai youth are not vehemently opposed to renting a bike, instead praising the possibility to “bring friends together for a fun and enjoyable bike ride”.

More information about the bike system and bike news in Shanghai can be found on Forever’s official info website, China RMB.

My eyes shifted, darting back and forth, spotting feather-less chickens, pieces of pig, bloody beef being chopped into digestible meat. I was lost in the heart of an outdoor meat market in the middle of Panjin, a tier three city in northern China. My sneakers traced mud across the cold, hard concrete and I covered my face from both the obtrusive airborne particles, as well as the unbearable meat-locker like conditions.

I walked into Panjin’s most affluent food shopping market in the center of the city, pried my hands out of my pockets, and slid through the plastic door sliders supposedly protecting the inside from the outside. This market represented a food shopping destination for Panjin’s elite. Delicate slices of tender beef were marked at unaffordable prices, a special Japanese import section was carefully displayed behind velvet ropes, and a row of JIF Peanut Butter shined like gold at the bottom of a dark mine.

Panjin’s City Center

Alas, I was buying Peanut Butter at this upscale shopping center. However a typical Chinese tier three city food shopper is most likely not purchasing peanut butter, instead spending around 200 to 300RMB per month at outdoor fresh markets such as the outdoor meat market mentioned earlier. However, as the income levels of these tier three cities continue to rise, and Chinese people seek safer, sanitary, and convenient food shopping methods, the amount of wet markets in small (and large) Chinese cities will continue to diminish. The unpackaged meat industry (aka meat markets) alone in China is set to drop below 10% of all accounted purchases by 2016.

Tier 2 and Tier 3 Supermarket Expansion

The recent global economic crisis in 2009 also makes these second and third tier Chinese cities ripe for foreign supermarket expansion. Wal-Mart, playing catch-up mode to Carrefour’s strong presence and brand image, opened 17 new supermarkets in China, most in second and third tier cities including Yancheng, Jiangsu, Xiangfan, Hubei, and Changde.

However, Walmart, Carrefour, and Tesco are not alone in Chinese supermarket expansion. They may have set the standard for all local supermarkets to follow but local Chinese supermarket chains such as Lianhua (controlled by the state-owned group Bailian Group) intend to go head to head with Walmart in 2010 and beyond. In 2008, Lianhua set targets to open 15 hypermarkets per year and at that time controlled over 120 plus-sized supermarkets across China. In Xi’an a tier two city located in central China, the supermarket scene is dominated by a local Guangdong controlled retailer named Vanguard which has 22 supermarket locations, compared to one Carrefour and three Wal-Mart’s.

There are signs however of supermarket saturation, Japanese supermarket retailer, Aeon Co Ltd. is likely to miss its target of opening 70 supermarkets in China by the end of February 2011 due to local delays. Another supermarket in Beijing, “C-Mart” uprooted and disapearred overnight last year, leaving behind unpaid bills and taxes. This leads me back to the small city of Panjin. It does not represent China’s wealthiest tier three city, however as of my count there were around 5 to 7 “super” wet markets and 3 supermarket style food shopping centers. None of these supermarkets were owned by international food retailers, yet most contained similar service and products. Much like the former Wal-Mart force outs of local food retailers in America, we may yet see a similar type of supermarket strong arming occur in China’s second and third tier cities.

Shopping Habits of Chinese Youth and the Future of the Food Shopping Industry

The presence of grocery stores in large and small cities in China does not mean that young Chinese are shopping at these locations. Convenience stores, online shopping, parental reliance, and well, no shopping at all, represents more typical shopping habits of Chinese youth. Leon Ni, a 23 year old Shanghai resident claims to only use his kitchen for instant noodles, seaweed soup, or for cutting fruit.

So if Chinese youth aren’t shopping anymore, then this diminishes all hope for future growth in the industry correct? Well no. Food shopping is not going anywhere. What’s changing most amongst Chinese youth in the food shopping industry is the habits and overall shopping experience. As Leon states, he and his friends enjoying shopping at Carrefour because it’s wide aisles and excellent selection make food shopping interesting as well as having the ability to “quarrel and fight with friends.” Enhancing the overall shopping experience is a huge opportunity for food retailers to tap into the Chinese youth market.

Also look for a growth in convenience stores in first, second, and third tier cities. In addition to the myriad of convenience store options that already exist in China, Wal-Mart entered this competitive market by opening three shops in Shenzhen last year. Convenient stores represent an opportunity to “hyper-localize” both experiences and products. Chinese college students looking for a study boost find more of these types of products, working individuals find more lunch options and so on.