Almost a year since its acquisition by Chinese company Nanjing Cenbest (a subsidiary of the China Sanpower Group), the 166-year-old House of Fraser department store brand has announced it will begin opening stores in China in a year’s time.

Since its founding in Glasgow in 1849, House of Fraser has become one of the UK’s most venerated retail establishments, with a chain of 61 outlets in the UK, counting the British royal family among its customers. As of April 2016, House of Fraser will add to its customer base shoppers in China, initially through the conversion of Cenbest’s Orient Department Store in Nanjing, then moving on to the cities of Xuzhou and Chongqing.

What is interesting in this move is not that the department store will be opening stores in China, which was a stated key reason for the acquisition last year, but the choice of cities. House of Fraser is bypassing the “obvious choices” of initial locations in the tier-1 cities, such as Beijing, Shanghai or Guangzhou, but is heading straight for the tier-2 cities.

These lower tier cities in China are experiencing economic and retail growth that is faster than in the more developed tier-1 cities. They are also less saturated markets, yet have substantial populations of increasingly sophisticated and well-heeled consumers.

Chinese consumers, increasingly well-travelled and exposed to the most prestigious brands the world has to offer, are demanding more high quality products and better customer service. The cachet of the House of Fraser brand, with its long history and established reputation, therefore has the potential to offer something different to the shoppers in these cities, which they cannot even get in the tier-1 cities. The company will also explore development of its consumer base among Chinese nationals travelling to the UK.

The department store market in China is one increasingly focused on lifestyle and experience, as discussed in Mintel’s Department Stores and Shopping Malls China 2014 report. Offering Chinese consumers a slice of Britishness on their own doorsteps could be crucial in defining a unique selling point for House of Fraser in China. But the brand will also have to work hard to gain attention, and to adapt its product and service offering to local consumers if it is to ultimately succeed in what is a highly competitive market.

Mintel’s Director of Research for Asia-Pacific, Matthew looks at the development of China’s consumer lifestyles and the impact on Chinese people and society. Having previously co-founded research company Access Asia, Matthew has worked exhaustively on trying to make sense of the myriad of contradictions in China’s economics and statistics on consumer markets across China.

Electronics Market

We work with some of the world’s leading brands and know the trends, the products, the components and the customers. And we know how they all fit together.

Read More
© 2016 Mintel Group Ltd. | Privacy Policy | Legal | Cookie Use