Aldi Süd to open its first store in China

Aldi Süd's first store in China will open in Shanghai on 7 June.
By Reidar Molthe

5 June 2019 08:47

Aldi Süd to open its first store in China

Aldi Süd has revealed it will open stores in China, with the first one opening on the 7 June in Shanghai, writes IGD.

China will become the 11th market where Aldi Süd operates standalone stores, strengthening its position as a global retailer. This announcement comes just weeks after Lidl closed its online operations in China.

From online to physical

Aldi Süd used a different approach when it entered China compare to all other markets where it operates.

It launched an ecommerce platform on Alibaba’s Tmall Global in April 2017, where it sells both grocery and non-grocery products.

The online shop was an efficient way to boost understanding of local shoppers with limited investments. It acted as a feasibility study that has led to its decision to launch its first bricks-and-mortar store in the country next week.

50 to 100 stores

The discounter plans to open 10 stores in the short term with an objective of 50 to 100 store openings in the medium term to ensure economic viability. The stores will have a more upmarket position in China than in other markets.

The online grocery offer, which included organic food and imported products proved popular amongst Chinese shoppers and has helped to build a more premium image and brand.

It is expected Aldi Süd will offer products imported from Europe with high quality perception such as health and beauty, dairy and organic. It will target aspirational shoppers, particularly those who desire western products at a more affordable price. However, Aldi Süd will need to carefully position its brand, as discounters in the past such as DIA have struggled to fully understand Chinese shoppers.

Invests 5 billion euro in 2019

For the reconstruction at home as well as the establishment of further branches abroad Aldi will invest more than five billion euro in 2019.

It is the largest investment program in the company's history, and among the biggest among any retailer ever.

While Aldi Nord is focusing its expansion abroad on Spain, France, Poland and the Benelux countries, Aldi Süd is now taking the big step into the Chinese market, hoping that growth in the Middle Kingdom will soon out pass its domestic market, where Aldi Süd for the first time in history is losing money.

A global retailer

By opening stores in China, Aldi Süd strengthens its position as a global retailer with a presence in 11 different markets. It also confirms that it is ahead of its competitor, Lidl, when it comes to developments outside of Europe with the U.S being one of the most successful and fastest growing markets for Aldi Süd.

In Australia, Aldi Süd continues to experience double-digit growth, which is strengthening its position as one of the major retailers in the market.

The strong presence of Aldi Süd in Australia could be a strategic opportunity for the future developments in China. The discounter could use the experience of its Australian suppliers exporting to the Chinese market to ensure the success of these new operations, concludes IGD.

Including its activities in China, Aldi Süd is represented in eleven countries with more than 6,240 stores. The Mülheim Group has around 149,000 employees worldwide.

Sources: IGD; ALDI, Spiegel a.o.

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