A Chinese grocery chain has plans to crack the highly competitive Canadian market with its first international location in Vancouver next month, and hopes to grow to up to 15 shops across B.C.’s Lower Mainland within the next five years.
Sungiven Food Canada Inc.’s smaller store size and wide array of in-house brand Asian products could lead to success with the local Asian population, as well as other Canadians looking for diverse cuisine.
“I don’t see … the same format as us in the industry right now,” said Terence Fong, senior vice-president of Sungiven’s Canadian arm, which plans to open its first store in a Vancouver shopping centre in mid-November.
The roughly 1,200-square-metre (13,000-square-foot) space will stock four of the company’s private labels: the eponymous Sungiven brand, as well as Onetang, Ontrue and Yuho. The company believes its in-house non-GMO rice and cooking oil products, coconut water and cashew nuts will be among its best sellers in Canada.
The company has two additional stores in the works for the near future. A second Vancouver location should open in December, while a Burnaby store is planned for early next year. Both will be smaller at nearly 300-square metres (3,200-square feet) and about 585-square metres (6,300-square feet).
Sungiven hopes to open another seven to 12 locations throughout the Lower Mainland over the next three to five years, though no specific locations have been announced.
The company’s small format offers an advantage to expanding quickly, said Fong, as it allows it to find space more easily than a typical grocer.
It also means they can build a presence in densely populated areas where bigger grocers may not fit. Sungiven’s first location, for example, will serve a population that would otherwise have to travel further to purchase similar ingredients at an Asian supermarket, Fong said.
The company in part chose that particular location — as well as the Lower Mainland for future expansion — due to its large Asian population, he said.
About 175,000 people living in Vancouver are of Chinese descent, according to Statistics Canada’s 2016 census. For the province, that figure grows to more than 540,000 people.
Sungiven’s plan mimics that of another ethnic grocer that entered Canada recently. California-based Filipino grocery chain Seafood City Supermarket opened a Mississauga, Ont., location in 2017 to cater to the area’s large Filipino community.
“This is probably part of a trend that’s going to continue to happen,” said Joel Gregoire, associate director for Mintel’s Canada food and drinks reports.
But shops like Seafood City and Sungiven appeal to a broad demographic, he said, as many Canadian consumers crave variety in their meals.
Grocers that want to remain relevant in the future need to have an ethnic food or internationally inspired strategy, he said.
Canada’s major grocers have been making moves to grow their presence in this space. Loblaw Companies Ltd. acquired the Asian grocery chain T&T Supermarket in 2009 and has since grown it to 27 stores in B.C., Alberta and Ontario.
Fong shrugged off concerns about competition from T&T, a chain where he has previously worked, saying Sungiven’s selection, prices and community-driven practices will win over customers.
Sungiven’s locations could also offer it an edge over T&T, said Gregoire, as many customers will choose their go-to grocery store based not only on selection and service but also location, especially how easy it is to get to it.
“It will be interesting to see where the locations go, relative to the T&Ts,” he said.
It’s feasible for a new entrant like Sungiven to be successful in Canada, despite the major grocers having a strong physical footprint, deep pockets and awareness of shifting demographics, he said.
But it may run into challenges as it tries to scale up, said Gregoire, adding the chain will likely take its time after opening the first few stores to learn what products sell best here and gather other important data points.
That seems to be the company’s roadmap. Fong said while Sungiven has ambitions to expand beyond the Lower Mainland in Canada, it plans to gain some experience and know-how in the country first.
The good news for them, said Gregoire, is that despite established competitors, as far as consumers go, “they’re hungry for these types of stores.”
Sourced From: Aleksandra Sagan – The Canadian Press