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Ablaze like a Prairie Fire 
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. Author: Mr. Alex Chen International Liaison Office of the Organizing Committee The 3rd China International Vending Systems & Commercial Self-Service Products Exhibition 2006 Mobile: +86-13818028583 Tel: +86-62918082 Fax: +86-62918125 Website: http://www.vendingshow.com E-mail: vendingshow@vip.citiz.net |
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