This past June, Germany’s Aldi officially made its entrance into China’s retail scene with two physical supermarket stores in Shanghai. This follows the supermarket chain’s soft entry into the world’s most populous country in 2017 with a cross-border e-commerce store first on Tmall Global, and then an online flagship store on the regular Tmall a year later.
Mintel’s team of retail experts recently visited the Aldi branch in the Jing’an District. Here, they discuss some of the things that surprised them during their visit, how Aldi outperforms other retailers, as well as the challenges the German supermarket chain will face in China.
Location and environment
Aldi’s store in Jing’an features a beautiful space that’s well-designed and aesthetically pleasing. It is a smaller-sized supermarket that’s conveniently located close to residential areas and a handful of kids’ learning centres. The footfall and transactions in-store are considerable, likely due to the fact that it’s still early days for Aldi in China. It’ll be interesting to see how this changes in the next year.
Aldi’s store in the Jing’an District
Despite the smaller space and limited SKUs, Aldi manages to cover almost all the product categories that make up consumers’ daily needs. Taking on the same product strategy as its stores globally, the majority of products retailing at Aldi are from exclusive brands handpicked by the company’s very own experts. In this light, Aldi has the advantage of quality control and product safety—which is in line with what they have always positioned themselves to be, that is, to offer ‘high quality at good value’.
It is said that Aldi is currently trying and testing out innovative retail strategies in China, from which they then quickly make adjustments and improvements based on customers’ feedback and data collection.
Aldi offers a mix of imported and local products; the imported products can help Aldi compete with premium supermarkets that focus on imported goods; while the locally-sourced products are a good bargain for Chinese consumers.
Aldi also helps customers with their purchase decisions. For example, in the wine and spirits section, clear information—from how it fares on the sweetness or sourness scale to flavour notes and country of origin—on each of their wines are displayed. To appeal to ‘foodie’ consumers, Aldi’s Jing’an store carries a range of hybrid products such as Sichuan-style spicy crayfish salad and the Berliner Bao which combines German sausage and sauerkraut in a traditional Chinese steamed bun. The store also features a sitting area where customers can enjoy their ready-to-eat selections.
Flavour notes and country of origin are clearly shown in Aldi’s wine section.
Seating area for customers to have their ready-to-eat selections.
Convenient and efficient
To cater to Chinese consumers’ need for an online payment service, Aldi launched a ‘Scan & Go’ feature on WeChat, allowing customers to skip the checkout line and make their payments via their mobile phones. In response to the fierce competition from local retailers, especially when it comes to delivery services, the German supermarket chain launched a WeChat mini program which offers instant delivery service to customers located within three kilometres of its store.
Self-checkout via WeChat is available in Aldi stores in China.