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An inconvenient truth: Lack of smiling clerks
00:00 UTC+8 March 8, 2011
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"WELCOME! Come on in," shouts a young sales clerk, one of 15 staff working at a 7-Eleven convenience store, or "c-store."
The young man, clad in a jacket emblazoned with the chain store's red, green and orange stripes, was sent to the 130-square-meter outlet in a business park on the outskirts of Shanghai for training in the finer details of customer service - a critical element in Taiwan-based President Chain Store Corp's strategy for getting a bigger foothold in Chinese mainland's crowded c-store market.
That particular outlet is the firm's flagship shop in Shanghai, which also serves as a training ground for staff, says Jackie Su, vice president of President Chain Store, which purchased the right to run 7-Eleven stores in the city from 7-Eleven China. "The most difficult task we face here is training staff how to greet customers."
Su - who joined President Chain Store in his native Taiwan back in 1992 - is betting that a welcoming atmosphere, along with high-quality products, will soon help 7-Eleven beat stiff competition in Shanghai.
Convenient life
Convenience stores have become a big feature of China's increasingly affluent, youth-oriented consumer culture and run the gamut from hole-in-the wall, mom-and-pop shops crammed with soft drinks and snacks to modern purveyors using sophisticated analytics to keep their shelves stocked with all kinds of food.
Total annual revenue at China's 380,000 rural and urban c-stores is 425 billion yuan (US$62 billion), according to estimates by consultancy Access Asia using data from the China Chain Store and Franchise Association.
Shanghai leads the way, with about 5,000 outlets serving its 20 million inhabitants. It's not unusual for a single block in the city to have as many as three c-stores, sometimes one next door to another. Local chains there include All Days (Haode), Kedi, Quik and Buddys. But it's other large Asian rivals, notably Family Mart, which has 7-Eleven looking over its shoulder. Executive teams at both companies are now leveraging expertise honed overseas in what could become a retail showdown for Shanghai's c-store sector.
Family Mart has had a head start in Shanghai - opening its first store there in 2004, and it now has 400 outlets. It chose Shanghai to launch its China strategy for several reasons.
The city has the biggest purchasing power in China and Shanghai is a city where you have to walk because of its many small alleys and roads, compared with Beijing, says Mitsuyoshi Harada, vice president of Family Mart.
Shanghai's Europe-influenced layout makes it easier for shoppers to stop by convenience stores for quick purchases than in Beijing, with its bigger scale, broad boulevards and heavier reliance on private cars to get around. Shanghai also has a high population density and a vibrant shopping culture.
It's no coincidence that Shanghai's big c-store rivals hail from Japan, via Taiwan.
Over several decades, Japanese c-stores have built up formidable businesses in Taiwan, which has many cultural and language similarities with the Chinese mainland. Replicating their Taiwanese strategies makes a lot of sense. Both companies saw a great opportunity and a treasure trove in Chinese mainland, says Harada.
But tapping that treasure trove has been easier said than done.
Buyers' market
Although Shanghai is notoriously difficult in terms of bureaucracy and fickle consumers, the biggest challenge for the foreign c-stores is hiring and training staff. At the moment, it's a "buyers' market," with jobs scarce for China's increasingly plentiful college graduates, says Su. "We only hire college graduates and three-year junior college graduates, while local shops hire older women. Some of our shop managers have studied at universities in the US, Europe or Japan."
But can the likes of 7-Eleven and Family Mart shake off the remnants of a retail culture still dominated by government-run enterprises? For the most part, Shanghai's home-grown retailers still have the business cultures resulting from previous decades of shortages and rationing, when shopkeepers wielded substantial influence over daily lives. Back then, customer service was also an after-thought, if at all.
Like 7-Eleven, Family Mart invests heavily in training staff how to handle customers. "We have to teach staff basic manners, from saying, 'Thank you for coming to our shop, to things such as not just tossing purchases at shoppers," Harada says from the downtown Shanghai offices of Family Mart's local partner, Taiwanese food company Ting Hsin Group.
As in other sectors such as services, foreign c-stores on the Chinese mainland have leaned heavily on their Taiwanese subsidiaries. Harada credits Family Mart's thriving business to his Taiwan staff - their ability to handle both Chinese and English-speaking cultures and their success back in Taiwan. 7-Eleven, which is the biggest c-store chain in Taiwan with 4,800 outlets and 30 years of experience, brought 14 of its Taiwan staff to Shanghai.
"Those Taiwan store managers stand next to staff and managers at local Shanghai stores and teach them by showing all the details, from how to greet customers to how to keep inventory," Su says.
"Those who provide good service and a good product mix will replace those old-fashioned local convenience stores," he predicts. "There will be a 'natural selection' among c-stores in Shanghai.
(Reproduced with permission from China Knowledge@Wharton, http://www.knowledgeatwharton.com.cn. Trustees of the University of Pennsylvania. All rights reserved. Shanghai Daily condensed the article.)
The young man, clad in a jacket emblazoned with the chain store's red, green and orange stripes, was sent to the 130-square-meter outlet in a business park on the outskirts of Shanghai for training in the finer details of customer service - a critical element in Taiwan-based President Chain Store Corp's strategy for getting a bigger foothold in Chinese mainland's crowded c-store market.
That particular outlet is the firm's flagship shop in Shanghai, which also serves as a training ground for staff, says Jackie Su, vice president of President Chain Store, which purchased the right to run 7-Eleven stores in the city from 7-Eleven China. "The most difficult task we face here is training staff how to greet customers."
Su - who joined President Chain Store in his native Taiwan back in 1992 - is betting that a welcoming atmosphere, along with high-quality products, will soon help 7-Eleven beat stiff competition in Shanghai.
Convenient life
Convenience stores have become a big feature of China's increasingly affluent, youth-oriented consumer culture and run the gamut from hole-in-the wall, mom-and-pop shops crammed with soft drinks and snacks to modern purveyors using sophisticated analytics to keep their shelves stocked with all kinds of food.
Total annual revenue at China's 380,000 rural and urban c-stores is 425 billion yuan (US$62 billion), according to estimates by consultancy Access Asia using data from the China Chain Store and Franchise Association.
Shanghai leads the way, with about 5,000 outlets serving its 20 million inhabitants. It's not unusual for a single block in the city to have as many as three c-stores, sometimes one next door to another. Local chains there include All Days (Haode), Kedi, Quik and Buddys. But it's other large Asian rivals, notably Family Mart, which has 7-Eleven looking over its shoulder. Executive teams at both companies are now leveraging expertise honed overseas in what could become a retail showdown for Shanghai's c-store sector.
Family Mart has had a head start in Shanghai - opening its first store there in 2004, and it now has 400 outlets. It chose Shanghai to launch its China strategy for several reasons.
The city has the biggest purchasing power in China and Shanghai is a city where you have to walk because of its many small alleys and roads, compared with Beijing, says Mitsuyoshi Harada, vice president of Family Mart.
Shanghai's Europe-influenced layout makes it easier for shoppers to stop by convenience stores for quick purchases than in Beijing, with its bigger scale, broad boulevards and heavier reliance on private cars to get around. Shanghai also has a high population density and a vibrant shopping culture.
It's no coincidence that Shanghai's big c-store rivals hail from Japan, via Taiwan.
Over several decades, Japanese c-stores have built up formidable businesses in Taiwan, which has many cultural and language similarities with the Chinese mainland. Replicating their Taiwanese strategies makes a lot of sense. Both companies saw a great opportunity and a treasure trove in Chinese mainland, says Harada.
But tapping that treasure trove has been easier said than done.
Buyers' market
Although Shanghai is notoriously difficult in terms of bureaucracy and fickle consumers, the biggest challenge for the foreign c-stores is hiring and training staff. At the moment, it's a "buyers' market," with jobs scarce for China's increasingly plentiful college graduates, says Su. "We only hire college graduates and three-year junior college graduates, while local shops hire older women. Some of our shop managers have studied at universities in the US, Europe or Japan."
But can the likes of 7-Eleven and Family Mart shake off the remnants of a retail culture still dominated by government-run enterprises? For the most part, Shanghai's home-grown retailers still have the business cultures resulting from previous decades of shortages and rationing, when shopkeepers wielded substantial influence over daily lives. Back then, customer service was also an after-thought, if at all.
Like 7-Eleven, Family Mart invests heavily in training staff how to handle customers. "We have to teach staff basic manners, from saying, 'Thank you for coming to our shop, to things such as not just tossing purchases at shoppers," Harada says from the downtown Shanghai offices of Family Mart's local partner, Taiwanese food company Ting Hsin Group.
As in other sectors such as services, foreign c-stores on the Chinese mainland have leaned heavily on their Taiwanese subsidiaries. Harada credits Family Mart's thriving business to his Taiwan staff - their ability to handle both Chinese and English-speaking cultures and their success back in Taiwan. 7-Eleven, which is the biggest c-store chain in Taiwan with 4,800 outlets and 30 years of experience, brought 14 of its Taiwan staff to Shanghai.
"Those Taiwan store managers stand next to staff and managers at local Shanghai stores and teach them by showing all the details, from how to greet customers to how to keep inventory," Su says.
"Those who provide good service and a good product mix will replace those old-fashioned local convenience stores," he predicts. "There will be a 'natural selection' among c-stores in Shanghai.
(Reproduced with permission from China Knowledge@Wharton, http://www.knowledgeatwharton.com.cn. Trustees of the University of Pennsylvania. All rights reserved. Shanghai Daily condensed the article.)
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