RT-Mart may trump Walmart to be China's power retailer of the future: Kantar

Kantar Retail has ranked a list of retailers operating locally in the mainland and given projections about each of them in the next five years. In the medium term, the top 10 retailers are set to be Walmart, RT-Mart, China Resource Vanguard, Watsons, Carrefour, Tesco, Yonghui, Auchan, Yihaodian.com and Bailian Group, according to the consultancy's 'China PoweRanking' study.

Now in its second year, the benchmarking study included input from more than 300 respondents to reveal how manufacturers and retailers view one another in important areas of their supply-chain relationship.

RT-Mart’s score of 69.6 per cent is just three percentage points less than Walmart’s 72.5 per cent, as manufacturers named the two retailers as the best ones to do business with.

The gap between the two rivals has narrowed since last year, as RT-Mart "uses its assortment to maximise product penetration, has clearly purposed layouts to drive the shopping experience, and demonstrates what can be done other than a 'lowest-price' strategy”, according to one manufacturer's comment.

Retailer branding has gained greater focus in China as the retail market gets increasingly competitive, forcing a move past slogans towards integrated external and internal communications.

Manufacturers such as P&G, Unilever, Wilmar, Bright Foods and Master Kong praise RT-Mart for its unified store image, good relationships with suppliers, ability to tailor its prices and promotions to meet local consumer needs and practical short- and long-term strategies that are communicated openly.

Details like store decorations, staff attitudes and shuttle services have also reinforced RT-Mart's reputation as the "wind vane in the industry".

In particular, one manufacturer comment cited RT-Mart's headquarters as having a "strong and stable influence over regional offices down to local store command, [being] effective in communicating its unified KPIs and characterising rigorous execution."

Last October, Walmart was involved in a controversy when ordinary pork was found to be sold as organic pork, forcing the temporary closure of 13 stores in Chongqing and the resignation of then chief executive Ed Chan.

The incident brought Walmart's problem with decentralisation of its retail operations into the open after its six regional offices were given authority to run independently, allowing local staff to manage suppliers and source for products, but in the process losing control of them.

Walmart has also seen market share erosion in the last quarter up to September 2012, according to CTR Market Research. Its weaker performance was due to lesser visitor numbers and a slowdown in the pace of its store openings.

Kantar Retail's methodology weighed three strategic measures equally with five business fundamentals, thus placing greater importance on sound strategy as an overall driving force in business performance.

Customised questionnaires were developed for retailers in the hypermarket, supermarket, convenience, and personal care retail channels as well as manufacturers in the grocery (food), grocery (non-food), health and beauty, and general merchandise categories.

Results for this year are tabulated on a two-year rolling basis, with additional follow-up qualitative interviews conducted to provide further insight into the data.