CRV-Tesco deal offers opportunity for new identity with consumers

By Mike Bastin (China Daily) Updated: 2014-06-03 07:12

As brands and branding require far more associations that build a strong, emotional attachment in the minds of the target market, China, with its 5,000-year history so rich in cultural and artistic content, offers a plentiful supply of suitable opportunities.

CRV's Tesco rebranding places it in a very strong position domestically where few corporate and product brands

CRV-Tesco deal offers opportunity for new identity with consumers

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dominate nationally. Retailers that come closest to national brands are possibly Suning and Gome, China's dominant consumer electronics and home appliances retail brands. But even here, strong regional disparities can be seen in market share distribution, with Suning enjoying far greater market penetration across South China.

Tesco's mainland China stores, once rebranded under the CR Vanguard name, will combine with CRV's existing outlets to form a total of 3,970 stores and shopping malls across China.

Major foreign food retailer competitors will be dwarfed. French food retailer Carrefour, which first penetrated comparatively early in 1995, can only boast 236 mainland China stores, and US arch-rival Walmart cannot do much better with around 400 stores in China.

In addition, Carrefour and Walmart also demonstrate a strong regional bias, with the former far stronger in North China, while the latter has penetrated in the south more.

But in order to seize what appears to be a golden opportunity for CRV to build the first truly national retail brand across mainland China, it has to move fast.

CRV needs to develop an engaging, open relationship with Tesco's management. Tesco's rise to the top in the UK can only be a benefit as CRV attempts to replicate the achievement across China.

This should be seen as an invaluable relationship with input considered vital at all times.

CRV also needs to move fast to develop its online offerings and brand image. Supply chain integration across online and offline operations is also essential.

But above all, CRV needs to build quickly on the decision to remove the Tesco brand identity from its stores and announce several major Chinese brand associations in order to demonstrate commitment not only to a Chinese brand but, crucially, to a Chinese brand image.

The author is a visiting professor at the University of International Business and Economics in Beijing and a senior lecturer on marketing at Southampton Solent University's School of Business. The views do not necessarily reflect those of China Daily.