What's in store for supermarkets in China?

A new supermarket opened on the first floor of my apartment building a few weeks ago, sparking speculation in the neighborhood about how long it will last.

Over the past decade, the same premises were rented out to several supermarket ventures. The lifespans of those businesses ranged from some years to just a few months.

Given the long line at the checkout counter, it seems the new supermarket is doing brisk business. Its well-stocked shelves and competitive pricing are attracting a steady stream of customers, including many elderly shoppers who travel several kilometers to take advantage of the bargains on offer.

Having a supermarket so close to our home is a big convenience for my family, and we are doing our part by buying as much as possible to help it survive the tough competition in China's retail sector.

While the world's first modern supermarket is believed to have made its debut in the United States as early as 1930, China did not get one until 1981 when the Guangzhou Friendship Store introduced the self-service model for foreign tourists.

China's supermarket sector took off in the 1990s, spurred by the gradual dismantling of the decades-old food ration system and the influx of foreign investment.

Today, China has more than 200,000 supermarkets of different scales, with nearly 30,000 being large or medium-scale outlets of major domestic and international chains. These chains have a stronger presence in large cities such as Beijing than in other regions.

Within a 300-meter radius of my Beijing apartment, there are at least four supermarkets. One, backed by Japanese investment, is renowned for its sushi, seafood and ingredients for Japanese cooking.

The other three vary in scale but offer similar products and services. Even the smallest, the newly opened one, boasts nearly 1,000 square meters of retail space.

The new outlet, which is part of a supermarket chain, is currently winning over customers with its lower prices. Some of the vegetables, fruits and meat are so cheap I can't help but wonder how the promoters manage to make money. Its lower prices are posing a significant challenge to the three other competitors in the area. With a limited customer base, more foot traffic in the new store means fewer shoppers for the other three. I am watching closely to see who will blink first in this retail showdown.

Reports say that more than 3,000 stores affiliated with supermarket chains closed in China last year, with predictions that the trend will continue this year as well. Intense competition is often blamed for the sector's woes, but other factors are also at play.

One key reason is the changing dynamics of Chinese families, especially in urban areas. Supermarkets are designed for large families, with buyers loading their shopping carts with food and provisions that their families would need for a week.

However, many young people now choose not to marry, and many married people choose not to have children. As a result, traditional bulk buying in supermarkets is gradually becoming history.

Another reason is the boom in online shopping. Why bother going to a supermarket and carrying heavy shopping bags when you can just tap your phone screen and have your order delivered to your doorstep within minutes?

The availability of efficient delivery services has made online shopping far more appealing.

In certain areas of some cities, online orders of fresh vegetables, fruits and yogurt can arrive within 30 minutes — quicker than a trip to the store. You can get what you want faster, at a lower price and without stepping out of your house.

Whether the century-old supermarket model can withstand these challenges remains to be seen. All I know is that I frequently visit the supermarket downstairs.

I go there because it is convenient and the prices are really low. If either of these factors changes, my visits to the store might become less frequent.

The author is former deputy editor-in-chief of China Daily.

kangbing@chinadaily.com.cn