An innovation perspective on Chinese retailers' competitive advantage

摘要

Given the emergence of strong local retail firms in China over the last two decades, this paper aims to explore their competence enhancement and capability building process from the innovation perspective. Innovative measures on retail format, activity and governance dimensions of three leading local retailers in China are investigated using an in-depth case study approach. After each case is studied on the three dimensions, a cross-case analysis is conducted using thematic analysis to examine their innovative strategies and to explore their sources of innovation. The three cases share notable similarities in their strategies that are in sharp contrast to those of foreign retailers. On the retail format dimension, they have all achieved differentiation by formulating niche strategies and succeeded in creating a strong reputation among customers and retaining the same. On the retailing activities dimension, they have all developed a profit-making model through unique supply chain management and stressed construction of logistics centres and operational standardisation. On the governance dimension, they have established an efficient incentive and reward mechanism to motivate employees and encourage innovative practice. They have also built long-term collaborative relationships with their suppliers. Based on these three cases, it is also found that local embeddedness, latecomers' advantages, business agility and a risk taking entrepreneurial mentality are the crucial factors behind the generation of efficient innovations of China's local retailers. With these findings, this paper has extended and enriched existing knowledge on latecomers' catch up and service innovation. It has constructed an analytical framework for retail innovation by building on relevant attempts in the existing literature. A theoretical framework that explains how indigenous Chinese retailers have managed to successfully compete with foreign retailers in China using innovative strategies has also been established based on empirical data.