Xin Yu Lou Brings Better Products and Service to a Growing Market in China

Feb 13, 2019

As the Chinese economy strengthens, Xin Yu Lou Department Store Group facilitates a healthy, quality lifestyle for their shoppers by providing better products and shopping experiences to a growing middle class customer base. Spend a minute getting to know 2019 IGA China International Retailer of the Year Mr. Zhang Hongrui, the founder of Xin Yu Lou. 

How did you get started?

Xin Yu Lou, meaning “The Store of Integrity” in Chinese, was founded in 1984 by myself and a group of fellow farmers. We started out and continue to excel as a chain-store business, featuring a department store format and good progress in a supermarket format. We joined IGA six years ago in 2013.

How has your marketplace changed over the years?

As China’s economy revs up and people become wealthier, consumption is quickly upgrading in both quantity and quality. Retailing spearheads this development and traditional retailers face massive challenges from cross-over players armed with mobile payment, social-network platforms, online marketing, and compensated click-and-pick services. This new breed of competitors aims to penetrate and disrupt the market, but they are also generating new opportunities: traditional walls between channels are dissolving, shoppers are buying everywhere and all the time, lifestyles diversify and new needs are generated.

Compared to metropolitans, the tier-3 and tier-4 cities where we are based see more middle-class consumers who are equally invigorated by technologies, but at the same time less burdened by real-estate expenses and under-served by the lack of quality products and good shopping environments. The unfulfilled need is real and guides our strategies. We aim to serve middle-class and above shoppers who are willing to pay more for better products. In accordance with the mid- and long-term trends in consumption, we further fine tune our go-to-market in positioning, format portfolio, category combination, and floor layout. We aim to provide better products with outstanding service; to meet, herald, and generate healthy, trendy, and quality lifestyles among the consumers.

What is your retailing philosophy?

We live our retailing philosophy by honoring who we are and by cherishing integrity. We serve customers and suppliers by safeguarding their interests with honesty and integrity.

Our service philosophy is to treat customers as friends by meeting, heralding, and generating healthy, trendy, and quality lifestyles among them.

We see management as a process of training and serving our team members with love. Before everything else, Xin Yu Lou develops its people and culture. The aim of management is to empower the rank-and-file with a sense of value, security, achievement, and a fruitful life.

What makes your store unique?

What makes us unique is also our core value that drives our growth—to think for others. Instead of profit maximization, we seek to maximize value, by thinking for all stakeholders while safeguarding our core interests. Our stakeholders are our employees, consumers, suppliers, fellow businessmen, and our communities.

Describe your culture.

We operate to achieve business longevity with happy and healthy team members. That’s why we focus on culture, process, and strategy for a holistic improvement of human resource quality and potential development. For instance, we frequently quote this saying: “Fix your eyes on profit and you will be led into a dead end; think for your customer and suppliers with sincerity, and you will be rewarded with opportunities and value.”

The well-being of people is among our mission as we aim to empower the rank-and-file with a sense of value, security, achievement, and a fruitful life. We provide a job with dignity and security; a platform that helps fulfill dreams and value; an environment of professionalism, upward mobility, and activeness; and a pathway for our people to learn to manage themselves and their families for success and fruition of potentials.

How do you show your shoppers that you are local?

We get in the decision process of our local shoppers by surveying them, talking to them, and observing them. We are quick in responding to their needs by fine-tuning our go-to-market in positioning, format portfolio, category combination, and floor layout.

How are you concentrating on fresh?

In buying and sourcing, we gravitate towards what customers want and how they want it, rather than what may look good on our sales report. In other words, we focus on value for our customers, and we gauge value by quality, not by cost. Our toolbox includes private labeling, origin sourcing , customized production, and a buyer team that works both at home and abroad. To ensure the quality of fresh products, we put in place stringent quality management processes in supplier inspection, initiation, storage, and merchandising. We also work with leading players such as Ecolab to provide safer foods and environments.

What’s the one IGA program that has changed your business?

IGA’s 5-Star Appraisal System, with its comprehensive scoring mechanism, innovative peer-reviewing process and educational sharing sessions, has greatly modernized our operation, which translates into a better shopping experience, happier customers, and a healthier performance record.

From the IGA Coca-Cola Institute, we become professional, standardized, and diagnostic in our management. From IGA-organized visits to retailers and suppliers, we effectively talk to fellow members, share our best practices, explore business opportunities, and acquire first-class retailing insights. The value IGA brings to Xin Yu Lou is tremendous and far-reaching.

What does being an IGA International Retailer of the Year mean to you?

We are immensely honored to represent China as IGA International Retailer of the Year. We see this as recognition and inspiration for greater achievement in the future. Xin Yu Lou will draw on its strengths in customer service and quality products, roll out an improvement process across all stores to make them four-star stores consistently every day, to meet, herald, and generate healthy, trendy, and quality lifestyles among our consumers.

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