The list of gripes against Hong Kong supermarkets is endless from regularly running out of staple foods to inconceivable price hikes. The almost complete lack of understanding their customer base beggars a true marketeer’s belief. Sai Kung bumbled along with the obligatory supermarket choice until recently. Now, there is no choice, other than in name, and service and product availability, almost unbelievably, is demonstrably worse.
If you want to pay through the nose for premium product service and choice you can go to Great or City Super on Hong Kong Island. They seem to have pretty much everything. It’s just that the prices are so … extortionate. A word that takes on more meaning when one realizes that, supermarkets for the well-heeled aside, there is a reason why Hong Kong is so challenged in the food shopping arena. It’s a lack of competition.
There are many supermarket chains. I counted 22 and that was without really trying. There’s Park n Shop and the heterographically titled Wellcome, of course, they are the two big ones. Jim Coke, author of From Start-up to Supermarket in 18 months referred to them as ‘the duopoly’. An interesting observation to which we shall return.
It’s not all ‘Scratch n Sniff’ and ‘Unwelcome’ as my children jokingly refer, there’s also Taste and Marketplace. Have you heard of 360, International, the list goes on? But, of the 22 that I found all were all ultimately owned by two companies, and there are no prizes for guessing which two. Hence the lack of competition; it’s a recurring theme through Hong Kong business.
Paul Stapleton in his article A tale of two duopolies: HK’s abysmal supermarket chains for China Daily (September 13, 2016) explains how the aircraft industry duopoly of Boeing and Airbus has brought about cutting-edge innovation in aircraft design, if not in legroom. Competition is fierce. He laments however that, “the Hong Kong consumer continues to be forced to endure a substandard shopping experience under the local supermarket duopoly.” He adds, “This anomaly is underscored by the intensely competitive environment here, where under normal circumstances substandard service providers quickly go out of business.”
The World Bank ranks Hong Kong the fourth easiest place in the world to do business, behind New Zealand, Singapore and Denmark. That being the case where are Walmart, Kroger, Aldi, Carrefour, Lidl, Tesco and Sainsbury’s? Can it be that they all ignore such a ripe piece of fruit for the picking? Or are there more sinister reasons for so many globally recognized names to be missing from Hong Kong’s super-marketplace?
Anecdotal evidence says that the duopoly divides the market up between them and decide what they’re going to charge. Many brands found in one owners’ supermarket cannot be found in the other. That’s a monopoly, not a duopoly. That practice allows the supermarket to charge whatever they want. And, if the customer wants that product they must pay for it. Some would call that extortion – the practice of obtaining something, especially money, through force or threats.
If supermarket owners have enough muscle to stop other, more competitive, supermarket owners from entering their arena who is to stop them? Such a practice is more reminiscent of gangs fighting over street corners but, the duopoly does seem to have their fingers in all the right pies to do such a thing and there’s no evidence they don’t. Competition is good for the consumer and not a dinosaur like cash cow that can continually get away with offering poor choice, substandard service and blithely get away with it.
As Paul Stapleton writes, “In a city that does so many things right — the airport and the MTR quickly come to mind — surely it is time … to … start providing a more reasonable shopping experience.”
©Joe Schmoberg
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