7-Eleven must develop online presence in China: analyst
The company’s market share has been declining since 2018.
Although 7-Eleven has a great ‘top of the mind recall’ and brand image for food and grocery purchases in China, the company needs to develop an online proposition to halt its market share decline and expand its omnichannel operations, according to GlobalData.
The report noted that 7-Eleven has extensive accessibility and store presence in China with over 2,800 stores, and its wide assortment of food and grocery products makes it a ‘go-to retailer’ for these purchases.
But GlobalData’s retail analyst Suresh Sunkara noted the company lacked online operations in China, putting it at a disadvantage as shown by its declining market share since 2018. The company also fell out of the top 10 grocers in terms of sales in 2020.
“Consumers also expect digital elements like QR codes, alternative payment methods in store and 7-Eleven needs to catch up with this to retain the digitally inclined young shopper,” he said.
A survey conducted by GlobalData found that 36% of respondents purchase food and grocery items from 7-Eleven, a company with a large young shopper base with 42.3% between the age of 25-34 years in China.
However, the report found it did have an audience amongst the older generations with 31.5% shoppers in Gen X and 23.8% shoppers in the Boomers generation. A majority – 62.3% of shoppers are women, the main influencers of food & grocery purchases in China.
Sunkara also noted the brand has captured a large 43.8% of middle income consumers with household income between $16,000 (CNY100,000) and $32,000 (CNY199,999), but its share amongst higher-income consumer of 38.5% is still lower than market leader Yonghui Superstores’ 51.3%.
“This trend in income groups stems from its value proposition of small, affordable items available for instant consumption, which attracts shoppers looking for deals and lower prices besides convenience,” Sunkara said.