How distribution works in third-tier Chinese cities
According to information from Hong Kong Trade Development Corporation the transportation network for instance in the third-tier Bohai Rim cities of China were improved by new highways and railways and larger cities got a facelift but sourcing is still done at different types of wholesale markets, however better tailored to the needs of the customers
There is a rapid development in Bohai Rim cities of China and demand for all sorts mid-range and branded products are on the rise and consumers become more knowledgeable of what is in style and trendy. Competition among retailers in different Chinese regions is fierce, and therefore large scale wholesale markets become important also for distribution of domestic and international brands. More and more those markets offer facilities for storage, transport, product display and even hotel accommodation as additional services. They are assisting suppliers to distribute their clothing, accessories, shoes and headwear, leather goods and household electrical appliances in second- and third-tier Chinese cities and neighbouring markets. Wholesale markets are cooperating with wholesalers and agents in these markets, or even set up their own outlets there to distribute their products.
Let’s take for example the Luoukou Garment Wholesale Mart, Jinan situated in an ordinary village north of Jinan city. It developed into one of the major distribution centres of garments and other products in Shandong province. Inside the Mart there are garment trade and wholesale centres and wholesale and special business zones for woollen garments, shoes, beddings, children’s wear and down garments, including services for tenants and completed with a convention and exhibition centre, as well as a hotel. All these services are implemented for wholesalers and agents operation in the mart as well as retail buyers from other cities and provinces. The Mart has daily customers in the order of 300000. Products are distributed to most of the cities and regions in the Shandong province. Wholesalers generally sell garment and footwear and some agents opt for domestic and foreign brands.
Another example is Shenyang Wu’ai Mart Garment City with 6500 wholesalers operating there and around 200000 visiting distributors and retailers daily. It is one of the garment and necessity wholesale centres serving the north eastern Chinese market outside of Shenyang. Branded garments are mostly deriving from southern, eastern and north eastern China, also from Korea, Europe and America and from Hong Kong. Sales activities include three north eastern provinces as well as Hebei and Inner Mongolia, but goods are sold to Korea, Japan and the Russian Far East.