Stocked up on 15 boxes of Earl Grey tea (伯爵茶) the other day after an impromptu visit to Wal-Mart during the work lunch-hour. The price of them had been cut to only 7 yuan a box, when the normal price is usually more than 20 yuan. It’s actually pretty good tea and Is the only tea I drink regularly. Usually I avoid Wal-Mart as I think it’s more expensive than other places and the fact that their stores in Changchun are a little out of the way for me.

The thing about Changchun is that it can be very difficult to know whether a particular shop will be expensive or cheap, without actually going inside and finding out.

From a western perspective you would expect the large supermarkets to be cheaper than the smaller stores – economies of scale and all that. However in Changchun I would say that it is much cheaper to get your things at the local market, or at a variety of different locations. Another thing is that the price of goods differs quite a lot depending upon where you buy from. It is quite reasonable to be able to walk around the corner and get something for half the price. You just have to shop around. A good example is the Hengkelong supermarket (恒客隆超市) at Guilin Lu. This is perhaps the most expensive place to buy daily groceries in the whole city!

Perhaps the deal with supermarkets is that you pay a little more just for the convenience of being able to get everything under one roof? Or maybe the supermarket concept is considered ‘upmarket’ and hense stores can charge more?

My personal belief is that this exists as there is no real competition. Prices are set not depending on what the market expects, but what the retailers think they can get away with! It may also be true that the Chinese consumers are not as savvy as consumers in the west, perhaps in part to the whole supermarket thing being very new. I think that many Chinese consumers place a high value on loyalty and will keep on coming back it they like a place – perhaps this is why they are prepared to pay more? In the west if a supermarket is 20% more expensive than its competitior and they are selling essentially the same stuff to the same market, It would be out of business in no time.