Marketing Assignment Why are Hypermarkets more common in some countries as compared to others? Hypermarkets are a combination of grocery store and a department store. Hypermarkets offer a lot of products and their variety under a single roof. While incorporating a low-margin, these markets focus on a large volume of sales. In order to accommodate their mission, these markers are typically found in rural towns or suburban areas where they are easily accessible and have enough land space for parking and big-box store. These markets are commonly found in places where there is an allowance of competition between small retailers and big giants. Hypermarkets are popular more in countries where larger stores are increasing, smaller stores are decreasing and the country is more economically developed.
These giants carry a lot of products at competitive prices under one roof providing a lot of advantages. However, there are a few countries who have restrictions upon foreign investors venturing into local economy, such as India. Riots and protests are carried out from small shopkeepers, traders and farmers when foreign investments take over, as there is a risk of them losing their livelihoods (Gillespie & Hennessey, 2010). What competitive advantages do foreign retailers have in Asian markets? One of the advantages that foreign retailers such as Carrefour and Walmart have in Asian markets is the low-discounted pricing.
For example, before Walmart was in China, local retailers used to offer the international products at a higher price without the same customer servicing. The brand itself offered the lower pricing and the greater variety of products. Another advantage that the foreign retailers enjoy is the access to a larger population.
Asia has the largest population numbers, and a greater population means greater sales and business flourishing (Reardon & Gulati, 2008). The global distribution system which these hypermarkets follow allows a better leverage against the local suppliers. When these markets enter the Asian market, they learn from their past mistakes and they can use it to their advantage. Lastly, their scale economies, brand name and experienced staff makes them succeed at a more improved level. What advantage do local retailers have on a competitive basis? One of the biggest advantage that local retailers have on a competitive basis that gives them an upper hand is the knowledge for cultural demands.
These retailers know the requirements of customers and how to sell it to them. They can entice the customer through influencing their demands. Secondly, local retailers have good relationships with the suppliers as well as distributors. Thirdly, they do not have to face as many government regulations as foreign investors. Moreover, they have loyal customers, and avail lower prices for goods, transportation, taxation and rents due to government subsidies. Are those advantages transferable to other Asian countries? Yes, other Asian countries can take advantages from these local retailer benefits, but the question that is more important is whether they would risk a severance of long-standing relationship with their loyal distributors.
For example, E-Mart had to buy Walmart in South Korea because the switch in the local economy didn’t suit Walmart. References Gillespie, K., & Hennessey, H. D. (2010). Global marketing. Cengage Learning. Reardon, T., & Gulati, A. (2008). The rise of supermarkets and their development implications. International Experience relevant for India (IFPRI Discussion Paper 752).