Parknshop Case Study

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In Hong Kong, the A.S. Watson Group and Dairy Farm International Holdings have turned the grocery retailing industry into a monopoly situation for the last thirty years. A.S. Watson Group operates a number of supermarkets under different brand names that target different income groups. The ParknShop is the one of successful brand that under A.S. Watson Group with over 200 stores in Hong Kong. Dairy Farm International Holdings has associated and joint ventures which operated over 5,700 outlets. Wellcome is found under Dairy Farm International Holdings which is the longest-established supermarket chain in Hong Kong. A report studied on the grocery market was conducted on the behaviors of the public in buying retail goods (Consumer Council, …show more content…

However, there are always rooms for struggling. In July 2010, CEC International Holdings Limited had decided to join the competition – 759 Store. To become a blockbuster, 759 Store has chosen to enter the market, with opening its stores at an alarming rate . There were more than hundred branches opened within the first two years. Unlike the traditional supermarket chain stores, 759 Store focuses on selling groceries and snacks. Their goods mainly import from Japan, Korea and other foreign countries, while sells at a relatively low price when comparing with other supermarkets. (759store.com, n.d.). And this action had awakened the awareness of the supermarket giants ParknShop and Wellcome. Long ago, there are always rumors on the supermarket giants ParknShop and Wellcome, they are keeping prices artificially high by pressuring suppliers not to sell to rivals who undercut them. (Nip, 2013). So, suppliers usually provide a recommendation on price to the retailers, so as to avoid those bigger clients complained about competitors selling products at lower prices. Swire’s Coca-Cola has this sort of recommendation price list as …show more content…

759 Store refused to follow Coca-Cola’s recommendation price list which provided and supplied by Swire Pacific. Even Swire Pacific has “advised” 759 Store to follow the price, 759 Store insisted to sell at a lower price which below the recommendation price and the two giant supermarkets’ prices. Finally, 759 Store stopped all Coca-Cola selling. At the meantime, Swire Pacific rejected all the supplies for 759 Stores. (Company statement of Swire Coca-Cola HK on the incident of "759 Store", n.d.) Nothing so bad but might be a blessing, 759 Store became famous as a victim of commercial hegemony when a distributor refused it supplies because it was selling Coca-Cola too cheaply. (The Standard, 2012)

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