Generalizing patterns of store-type patronage: an analysis across major Chinese cities

Abstract

A systematic, analytical study is presented of patterns of patronage across store types (including hypermarkets, supermarkets, grocery stores and free/wet markets) in urban China. Using consumer panel data collected from a cumulative sample of almost 5000 households, results are generalized across 8 major cities (from the North, South, East and West of China) and 6 packaged goods categories (including traditional Chinese items like soy sauce and more contemporary items such as packaged laundry detergent). Analyses show that there are definite patterns of store-type patronage in urban China, most of which are predictable from the NBD–Dirichlet model (e.g. double jeopardy and the duplication of purchase rule). These patterns generalize across all the city/category combinations studied in this paper, although some important deviations are also identified (e.g. an excess loyalty premium). It is shown how retailers and planners can make use of the observations and theoretical predictions to assess key measures of patronage.

Keywords:

• Chinese retailing
• retail types
• retail formats
• store patronage
• Chinese buyer behavior
• geographical generalizations
• Dirichlet model

Acknowledgements

We are indebted to CVSC-TNS Research Co. (CTR) for supplying consumer panel data, especially to Dr Jiang Tao, Leo Lui and Peter Lee for their assistance and advice. Yimin (Stephanie) Huang provided useful comments. The project was funded with a grant from the Australian Research Council (ARC Grant DP0452489).