Unique concept reflects the spirit of commerce.

Established in Muelheim of Germany in 1964 as the first-ever cash-and-carry (C&C) supermarket, METRO is an internationally renowned leading company in C&C distribution system. After its 40 years’ development, METRO has become a giant retailing and trade group, ranking third in Europe and 5^th in the world. According to Forbes magazine of US as of year 2003, METRO was ranked 58^th among all the fortune 500 companies. So far, METRO Group has established a total number of 2,153 supermarkets in 28 countries and recruits over 240 thousand employees worldwide, covering Europe, Asia and Africa continents. In the year of 2003, the total sales volume of METRO Group reached 53,000,000,000 Euros of which 50% was achieved from countries outside Germany.

As one of the largest and most successful multinational companies headquartered in Germany, METRO deals with the selling of numerous brands in different areas. Thanks to its clear-cut management strategy, namely, the METRO Group controls and manages the whole shareholding company, the group is getting more competitive with each passing day. The business area of METRO Group can be divided into 4 parts, i.e., C&C, food specialized selling, non-food specialized selling and department stores. The C&C, which targets commercial businesses and specialized clients, takes in lion’s share of METRO Group’s business. While the other 3 fields mainly focuses on end-consumers in the way of retailing sales. METRO’s intelligent and market-oriented selecting and delivery system ensures its provision of well-qualified products both in food or other industries for the clients. For all these, METRO is always known for its delivery of fresh foods.

Based on its successes achieved in Germany, METRO Group quickly sought to expand its businesses overseas. Currently, METRO has already made itself become a much competitive capital market oriented giant in the international retailing industry. Compared to other trade companies with limited business only domestically, METRO tributes its success to such important factors as unique ways of business operation, fixed structure of business operation, advanced management philosophy and strict quality control system all of which help to enable METRO take its leading role in the sphere of international trade.

The strategy of international operation, which was implemented by METRO C&C Co., Ltd. (the Group’s largest sales branch), served as the motivated power for METRO Group’s sustained development. So far, METRO C&C Co., Ltd. has been practicing its highly-held marketing and sales philosophy in nearly 500 supermarkets of 26 countries worldwide.

In 2002, METRO Group successfully opened 2 supermarkets in Vietnam and Japan. And then India witnessed the newly-born METRO supermarkets as of year 2003. In the mean time, METRO conducted the feasibility study in such Asian countries as Malaysia, Philippine and Indonesia. However, the Group still regarded China as the most important market in Asia.

Settle in China and devotes to serve the society.

In the year of 1995, METRO Group entered the vibrantly developing Chinese market by co-establishing the Jinjiang- METRO C&C Co., Ltd. with the national famous conglomerate --- Jinjiang Group. METRO was well granted the opportunity to expand its businesses in China since the country was all the more seeking to develop its national economy.

1.      China’s reform and opening-up policy.

Authorized by the Chinese government, METRO was among the earliest foreign enterprises to deal with business in the country. METRO sought to explore cross-provincial chain store enterprises and served as the model in China’s reform in the sphere of circulation.

2.      China’s entry into WTO.

Right during METRO’s developmental period in China, the Chinese government was appling for its membership in WTO and the country is quickening its pace of economic globalization. Thanks to its obeying of the trade regulations under the WTO framework, METRO was ensured by law to accomplish success in China, which all the more demonstrated the necessity for the organization to take China as a member.

3.      China’s fast economic development

The rural-urban integration in east and the development of the western provinces of China all benefited from the country’s over 20 years’ fast economic development, which helped METRO seek to explore a wider market.

METRO’s initial great success in China brought brand-new management philosophies to the country’s circulation sphere. At present, METRO had been running 20 supermarkets throughout China, covering such major cities as Shanghai, Chengdu, Shenyang and Dongguan. The Group made its total volume of investment reaching 300 million US dollars and recruited over 6,000 employees in China. By the end of year 2003, Metro’s total sales amount in China reached 2250 million Euros.

China was the first and the largest, most important as well as the most successful country in Asia that METRO conducted C&C operations. METRO’s unique C&C management philosophy, featured by such advantages as large quantity, low cost and price and excellent goods at reasonable prices, played an important role in making it successful in China. All METRO’s supermarkets boasted a complete range of both food and non-food commodities in order to meet customers’ demand and provide single-stop-type convenient shopping.

The focus of C&C, lying in developing B2B trading, distinguished METRO from other supermarkets selling products only to end-consumers. To be registered as specialized customers of METRO and credited with free member card, one shall present relevant documents to demonstrate his business background. There would be METRO’s staff running the checking processes at the supermarket’s entrance as well.

To gain profits and control the selling prices, any enterprise had to maintain its advantageous position in cost control. Due to this, low costs and preferential prices were supplementary to each other. Since most of METRO’s clients needed to re-sell the products, the supermarket had to provide them with the most competitive prices to allow all their clients gain profits.

The strategy of making low costs should be implemented in such ways as conducting stockroom style, simplifying the decoration process, utilizing low-cost equipment, promoting self-services and sending direct mails etc.

To better understand C&C, one should first of all know clearly who were METRO’s clients. Those clients bought goods in METRO not for fun, but for conducting further businesses. According to METRO’s standard definitions, the Group’s clients fell into 3 categories,

1)     HORECA, namely, those restaurants, canteens and other dealers of the catering industry. This client group covered all organizations in the lodging and catering industries. They needed to purchase both food and other commodities, mostly fresh food for cooking.

2)     Traders. They mainly purchased food as well but would sell them all to others soon after. This group of clients included grocery stores, fruit-and-vegetable stores, butchery stores and bakery stores.

3)     CBU, namely, all the enterprises and organizations apart from the catering and trade industries. This group would include such entities as large-scale industrial enterprises, small-scale private enterprises, non-food traders, government bodies and other organizations.

METRO’s C&C hoped to provide its specialized clients with a complete range of products to meet all or most of their needs. Therefore, the management philosophy of METRO is “Incorporating all businesses” which would reduce transaction costs and save time as well basically.

For example, METRO mainly dealt with the businesses of food sales even though the supermarket also operated the selling of such commodities as dry and fresh food, appliance, household goods, textile fabrics and seasonal commodities etc. Only due to this, METRO was most competitive in the sales of fresh and frozen food, namely, fruits, vegetables, fresh fish, meat, dairy and deli. Another main focus of the supermarket’s lied in the selling of wines of different countries. METRO strictly ensured the good quality of its products and adopted more strict standards and processes in selecting fresh food.

Different from other supermarkets, all METRO’s commodities were placed according to various needs of its specialized clients. A good case in point as its group-packaged commodities which well distinguished itself from the competitors. The owned brand METRO goods were all produced only for METRO and would be sold by the Group’s sales department solely, all of which reflected the actual situation of the commodity being above the price in value.

It would also be of vital importance to keep goods always in stock for METRO’s clients. To ensure this, METRO took the stockroom style management through which its clients could better utilize their warehouse and avoid spending excessive money in buying commodities.

Each branch supermarket of METRO had 50 to 100 thousand specialized clients which made the Group’s total number of clients in China reaching 1.4 million. Under this context, METRO would be able to ration large numbers of commodities and quickly launch its clients’ new products to the market.

It was of no doubt that this kind of practice would create vast business opportunities for both METRO and its clients.

The long-term success of METRO’s C&C system attributed to its benefits awarded to the clients in the final place. METRO also boasted itself for the following advantages,

1)     Diversity of commodities. This would surely allow clients of different fields to go single-stop-type shopping. METRO was best known for its highly qualified and fresh goods. Though it also faced price competition as always, the Group succeeded in maintaining its competitive edge relying on the global sourcing system and low-cost management philosophy.

2)     The owned brand of “METRO”, the products of which were well above the price in value, helped to supplement the range of commodities sold in the supermarket. All METRO’s clients were satisfied with this since they could buy them at wholesale prices even if they didn’t choose to purchase them in bulks.

3)     Transparency. This advantage could be best exemplified for its net price and elaborate invoice, the former did not include any other additional fees and the latter clearly demonstrated the price-and-good information for easier supervision.

4)     METRO’s treasure — honesty. METRO had always been maintaining the full supply of goods and not hesitated in fighting against counterfeit and inferior commodities. The final goal of the Group was to establish long-term and sustainable relationship with its clients and customers.

During its developmental process in China, METRO gained great supports from the state government as well as the society.

In China, METRO was the first enterprise that being granted the certificate of chain store management to conduct nationwide businesses as a pilot unit.

Serving as the “supporter” for small-scaled free traders, METRO also helped the Chinese government holding out its policy to sharpen the country’s competitive edge.

METRO created a large number of employment opportunities as well. Besides, the Group made all efforts to provide training courses for its employees at all levels in order to improve the overall quality of the Group’s local staff. METRO Group also cooperated with Harniel Foundation in providing scholarships for Chinese students to learn business administration courses at the University of Applied Sciences, Worms, Germany. Apart from receiving college education, these students could also take C&C on-the-job training and joining METRO seminars as well. Moreover, they could study courses delivered by Institute of East Asian Studies – Ludwigshafen Business College after which they would take the managerial position in METRO.

Expanding the influence and accelerate the developmental process

Located in Putuo district of Shanghai, the new METRO China headquarter building was put into use. The new site not only served as an office place for the Group’s executive board of directors, but also a training center for METRO in China. All METRO employees in China and the whole Asia Pacific region should receive their trainings there. In the mean time, METRO Sourcing Co., Ltd. (Hongkong) also set up its representative office in the building.

To better communicate with its clients, suppliers and employees, by the year of 2002, METRO had established 4 regional headquarter in China, covering Northern, Eastern, Southern and Central part of the country. Aimed to further promote its exporting to China and made more contributions to the country’s local economies, METRO Group decided to quicken its pace in expanding businesses there. In the next 5 years, the Group would invest a total amount of 600 million Euros in establishing 40 new METRO C&C supermarkets within 3 to 5 years, which made its total number of chain stores in China reaching 60. .