Marks & Spencer to focus on Beijing, Shanghai

Matthew Crabbe, Asia-Pacific director of research at Mintel China, a UK-headquartered marketing research agency, said that as M&S had been sourcing products in China for many years, it ought to have gained sufficient "local knowledge".

Therefore, its announcement that it is looking to open new stores in big cities such as Beijing and Guangzhou, where competition is already fierce, with a local partner because it needs to rely on local knowledge, shows that the company still has not got its strategy right.

He said: "Its stores continue to be very quiet when I have been to them, and it has had problems with local clothing sizing, and appealing to younger women." Also, the fact that it is considering closing stores in second-tier cities close to Shanghai is not encouraging, said Crabbe.

Crabbe said Marks & Spencer has never really defined itself well to Chinese consumers and it has failed to work out what its core market in China is, and how to appeal to those consumers. It also seems to have failed to get its store locations right and even its flagship store on Nanjing Road always seems relatively empty, which is a very expensive space not to have high footfall and sales, he said.

The food offering has always been restricted by limits as to what it can import, and so this does not give it a whole lot of scope to offer anything that cannot be obtained from elsewhere, given the number of high-end supermarkets now in cities like Shanghai, said Crabbe.

M&S appears to need, and be looking for, local help to give its China business a more positive direction. If this is what M&S is doing, then it has the opportunity to turn its business in China around, but it will have to think radically, move fast, and listen more carefully to its Chinese customers, said Crabbe.