April 29, 2021

Aldi wants to stay in China

Aldi China CEO Christoph Schwaiger (photo: Aldi Süd)
Aldi China
Aldi's man in China: Christoph Schwaiger
Four years ago this week, Aldi created an online presence in the People's Republic. In June 2019, Germany's most profitable food discounter opened the first of now 15 stores in Shanghai.

But a lot has happened in the world since then. Covid has hit retailers particularly hard, while international relations between China and the West have soured.

Country manager Christoph Schwaiger insists, however, that "our focus remains on building a long-term presence in China". While watching political developments "closely", he sees "no direct effects at an operations level on our business activities".

The privately-owned company has underlined this international commitment to a vast market, which returned to record economic growth in the first quarter, by sharing some photos of its latest stores: 

Aldi store in Shanghai - 1
Aldi Süd
Aldi store in Shanghai - 1
Nonetheless, the whole experience has been a baptism of fire for Austrian manager Schwaiger and his team. Although the city of Shanghai provided economic assistance during the pandemic, the subsidiary of Mülheim-based Aldi South has had to face "considerable extra costs".

Overall, though, Schwaiger is "satisfied" with business in 2020, which also enjoyed a "distinct increase in online orders". 

Aldi store in Shanghai - 2
Aldi Süd
Aldi store in Shanghai - 2
Via local messaging and payments app WeChat, Aldi makes a home delivery service available to all customers within a three-mile radius of its stores. The discounter also partners with online platforms Ele.me, JDDJ and Meituan in order to embrace a broader catchment area within China's largest metropolis.

Under the slogan 'Everyday value – Handpicked for you', local reports would seem to indicate that the global discount pioneer offers a more upmarket proposition in the Middle Kingdom than at its other nine foreign operations.

Aldi store in Shanghai - 3
Aldi Süd
Aldi store in Shanghai - 3
The assortment includes a range of more than 1,600 carefully curated lines across fifteen categories, including both locally-sourced and imported products. Among these are wines & spirits, snacks, beverages, fresh produce, ready-to-eat, ready-to-cook, as well as personal care and pet care products.


The decision to expand in Shanghai was clearly motivated by the sheer purchasing power of its 30 million highly aspirational and upwardly-mobile inhabitants. The historic metropolis is also a major global logistics hub easily accessible by both sea and air.

Aldi store in Shanghai - 4
Aldi Süd
Aldi store in Shanghai - 4
Meanwhile, China is in growth mode again. The People's Republic may have been the first to succumb to Covid in Wuhan at the end of 2019, but it is also the first major global economy to have emerged from the tunnel.

Growth in gross domestic product beat all records during the first quarter of this year. Admittedly, this was against some soft like-for-likes, but two things are abundantly clear: China is firmly back in the business race and Aldi intends to profit from it. 


Lebensmittel Zeitung print and digital (photo: LZ)
LZ
Our German retail B2B newspaper, Lebensmittel Zeitung, in print & digital
Read in German
: 'Aldi Süd will in China bleiben' by international editor Mike Dawson on page 8 of Lebensmittel Zeitung, no. 17, 30.04.2021


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