Companies

Marks & Spencer unveils plan for new Shanghai stores

By Tang Zhihao (China Daily)
Updated: 2011-05-11 10:06

Experts say Marks & Spencer Group Plc may find it difficult to increase its market share in China because of tough competition in the retail sector. [Photo/Agencies]

SHANGHAI - The British-based apparel and luxury food retailer Marks & Spencer Group Plc (M&S) intends to open more stores in Shanghai to increase its market presence.

Its latest outlet will cover an area of 3,700 square meters in the City Centre shopping mall in the city's Changning district.

According to a company statement, M&S plans to build a strong presence in the Shanghai region as one of its priority international markets. M&S opened its first store in Shanghai in 2008, and it currently operates four outlets in China - three in Shanghai and one in Ningbo, Zhejiang province.

Related readings:  M&S admits to 'boob' over bra costs  M&S axed Jodie Kidd over cocaine claims  M&S, the merchants of Venice reveal their strongest collection yet  Next gets warm weather, Royal Wedding boost

"The Chinese market has played an important role in our international expansion strategy, so we may have more stores to open before 2013," said an M&S' marketing department insider in Shanghai who declined to be identified. "The speed of the expansion depends on our overall performance in China."

The company will devote more attention to developing its presence in the country's coastal area over the next year or two, the insider said.

"M&S has some unique products that help to distinguish it from many domestic companies," said Fan Yanru, deputy secretary-general of the China Commerce Association for General Merchandise. "Its service quality and management are also better than many domestic retail companies."

Fan said that a major problem Chinese retailers face is differentiating themselves because brands in stores are similar, and M&S is doing well in that regard.

Nevertheless, some industry experts said M&S' market performance has not been as good as expected. According to Fan, M&S has not fully understood the Chinese market, and that will restrict its development in the country.

"Chinese consumers' have different preferences and behavior than their peers in the US and Europe, so it will take time for the company to understand the market," Fan said. "Price is a key factor for the Chinese consumer."

Qi Xiaozhai, director of the Shanghai Commercial Economic Research Center, said it is hard to predict M&S' future in China.

The company might have difficulty increasing its market share in China because of the tough competition in retail, Qi said, and it could take a long time for M&S to build brand recognition in China.

"In large cities such as Beijing and Shanghai, some retail companies have achieved high brand recognition and loyalty. It might be difficult for M&S to capture market share from rivals," Fan said.