A comparative study of the developments of city retail Frank Feng

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A comparative study of the
developments of city retail
industries in UK and China
Frank Feng
3 June 2009
Contents
1. Impression of the UK retail industry
2. Similarities and differences of China and
the UK’s retail industries
3. Perceptions and thoughts
1、impression of the UK retail industry
 UK is a country about opening shops.
----Adam Smith

UK’s retail industry is at a maturity stage. In cities, the
retail industries have full range of products and functions,
reasonable structures, nice atmosphere and good customer
service. Therefore UK’s retail industry has become one of
the most active and creative industries in the UK.
1、impression of the UK retail industry.
a.
b.
c.
d.
e.
Glass roofed shopping malls have become the symbol
of city retail industries. It does not only give customers
visual impact, but also provide leisure experience while
they are shopping.
The decoration in different shops is beautiful and
trendy. It provides customers with a nice atmosphere as
well as boosting their enthusiasm about shopping.
Full range of products available to customers,
including food, furniture, commodities and so on. The
depth, width, and variety of product range provide
customers with any type of selection.
Many retail brands have their own branded products.
This does not only reduce the cost of products, but can
also attract more customers with reduced prices. UK has
much more own branded products and China.
Catalogue selling is a special type of retailer, for
example Argos, can be learnt by Chinese business. This
business model can reduce the intermediate
transportation and handling, as well as maximizing the
limited resources in city center areas.
2、Similarities and differences of China
and the UK’s retail industries
Similarities:
a. Retail industry is an important element in economic
development. It can boost spending, increase
employment and energize markets. The role of retail
industry has an increasing importance to the countries’
economic development.
b. Globalization of markets, markets become more
open. This enables the businesses to become more active,
and adds international elements to cities. For example, in
the UK, we have IKEA, Starbucks Coffee. In China, we
have Tesco, B&Q.
c. Fierce competition within markets, resulting
businesses to experience hard times due to competition.
2、Similarities and differences of China
and the UK’s retail industries
Differences:
UK
a
Relatively complete law
from the government.
e.g. safety of foods law in
1990
Competition law in 1998
China
Relatively late legislation
e.g. There are too many
regional government policies,
but lacking normative
business laws on a national
level
2、Similarities and differences of China
and the UK’s retail industries
Differences:
UK
b Moderate intervention
from the government
e.g. if a piece of land is
to be used for business,
it needs to be voted by
local representatives.
Safety on foods,
government authorize
large retail businesses to
monitor foods
China
Direct intervention from the
government
e.g. government directly use
the land for business
government directly monitor
foods
2、Similarities and differences of China
and the UK’s retail industries
Differences:
UK
c Industry associations
have strong impact on
industries, they have
abilities to apply
restrictions
China
Industry associations can be
improved. They lack ability
to apply restrictions.
2、Similarities and differences of China
and the UK’s retail industries
Differences:
UK
d Retail industry is at
maturity stage
e.g. unemployment rate
at 2009 is 6.6%.
200,000 people
unemployed, 3,000,000
people employed.
Consumer market is
relatively saturated.
China
Retail industry is at
development stage
Consumer market has a
bright future.
2、Similarities and differences of China
and the UK’s retail industries
Differences:
UK
e Developments between
cities are relatively
balanced.
China
Developments between cities
are at different stages, they
vary largely and sometimes
apporaching two extreme
ends
3、Perceptions and thoughts
Chinese Government level
a. Government need to fasten the pace of legislation. There
is need for a (relatively) complete and normative national
business law to direct the development of retail industry.
b. Need to create a plan for city retail business
development as soon as possible. They need to take in
account of the level of economic development, city population,
consumer power to plan the city’s development scale, function,
structure and layout, to make it more scientifically sound.
c. Enhance the relationship between industry associations
and governments. Encourage the industry associations to play
a more important role in service and management.
d. Development of retail industry needs to persist in the
‘Dos and Don’ts’ principle, we need to create retail
businesses with multiple functions. However, on the other hand,
we need to restrict the excess opening of retail businesses
which would result in abusing spaces and breaking laws.
e. Formalize the auditing procedures in the government,
emphasize the function of hearings.
3、Perceptions and thoughts
Chinese besiness level
a. We can learn and use the glass roof design in shopping
malls. Many existing shopping malls and areas in China can
implement such designs to enhance the leisure functions in
shopping malls.
b. Retail brands, especially large businesses should develop
more own branded products, and to increase their market
share of own branded products.
c. Encourage creative business models, for example
implement the UK’s Argos model, and encourage online and ebusiness models.
d. Correct targeting and positioning. Within the fierce
competition market, businesses need to take in account of
requirements of the consumer market, specialize in market
sector, and position the business in a right segment to gain
competitive advantage.
e. Overseas expansion. Apart from expanding national market,
there is also a need to expand international markets.
3、Perceptions and thoughts
Suggestion for UK retail industry
Government Level
Moderately reduce the restrictions to retail industry and related
industries. For example reduce the restrictions on the opening
hours of shops. This will boost spending and make shopping
more convenient for customers.
Business level
Encourage integrated and multi-functional retail businesses.
Apart from expanding and building more shops, retails
businesses can integrate leisure, entertainment and other
creative functions.
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