The
past few years have seen an upsurge in the development of China's
automatic vending machines market. Manufacturers, retailers and
other businesses have had a teetering start and gone through
the stages of import, proprietary R&D and manufacturing since
1992, when second-hand Japanese and Korean vending machines first
made their foray into China. But now, this market is teeming
with opportunities and a bright future is beckoning. According
to industry analysis of the home market, the vending machine
trend in China is becoming clear: vending machines are spreading
all over the country like a prairie fire, migrating from the
affluent coastal areas and mega and second-tier cities to hinterland
and sub-developed areas, from star hotels, subway stations, airports
and other high-end venues to lower-level communities.
Industry experts predict that the potential for China's vending
market is capable of one machine for every 500 people, against
currently one for every 23 in Japan, 40 in the US, and 60 in Europe,
as China is still some way from the developed markets. China's
urban population of 360 million in 1996 represents a market potential
of 730,000 vending machines, with an estimated annual sales of
RMB50 billion on the basis of RMB200 per machine per day.
Base on overseas experience, industry experts foresee an installation
of at least 100,000 vending machines for the launch period, with
an annual gross output value of RMB1 billion; 500,000 vending machines
for the development period, with an annual gross output value of
RMB10 billion, and 3 million vending machines for the mature period
with RMB6 billion. China's vending machines is set to evolve into
a tremendous business.
China's vending machines market is poised to boom during 2004-08
on the back of tremendous opportunities brought by Beijing's claim
to the 2008 Olympic Games and Shanghai's entitlement to the World
Expo 2010. The sector will enter into the development phase since
2008, when vending machines will stand to trigger the third retailing
revolution in China after department stores and supermarkets.
Auspicious prospects serve as a big confidence booster among
manufacturers and operators alike. According to estimates, the
market has attracted the attention of 10 domestic developer-manufacturers
and 40-odd operators. Nankai Guard Co., Ltd. and Qingdao Aucma
have invested RMB160 million and RMB60 million on proprietary R&D, manufacturing,
marketing, sales and operation, respectively since 2000 and 2001.
Giants such as Haier have also set their sights on this niche.
Nonetheless, the market is still dominated by Nankai Guard and
Qingdao Aucma.
Moreover, overseas giants have also begun to secure their beachhead
in the market. As Japan's Vending machines market saturates, Fuji
Electric, Japan's leading AVM manufacturer, and Japan's beverages
companies, the world's largest Vending machines operators, are
both China market bulls. Meanwhile, US industry bellwethers like
De Amertek and Hengxin Group have also begun blazing trails in
China.
As consensus of the international retail industry puts it, China's
large and mid-level cities have reached the stage of rapid growth
for vending machines (i.e., the per capita GDP is in excess of
USD 4,000).
China's vending machine consumer base can be broken down into
three categories: the teenagers and the young and middle-aged,
who are trendier, more receptive of things novel, apt to try, and
accustomed to vending machines; the white-collar and socially active
consumers, who belong to the high-income brackets, are insensitive
to price, and pursue convenience in consumption and shopping as
they lead a fast-paced life; and the travel and leisure enthusiasts,
who are inclined to use vending machines in leisured and easy settings.
Take Shanghai, China's commercial hub, that has entered the GDP
stage of USD 5,000-8,000 per capita. Profound changes are taking
place in the goods and services consumed, the consumer habits and
philosophy among Shanghai's citizens. Shanghai's 2,000-odd high-end
office buildings, with a vast white-collar consumer base, are capable
of vending machines on a large number of floors, though it is unrealistic
for the buildings to house many shops. Shanghai's rapidly growing
rail system entails constant flux of instant consumers, enabling
vending machines to be installed along the rail lines. With tourist
and consumer sites increasing by the day, these sites are also
premier places for vending machines.
It is widely believed among industry authority that now is the
prime time to plunge headlong into the Chinese vending market.
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