The analysis of Chinese department stores with the fierce competition of online stores

－A case study of Wanda department stores

Word Count: 9850

Executive Summary
Chinese department stores have suffered from the strong competition of online stores in recent years, Wanda department stores in particular. A significant 56 Wanda department stores was collapsed in 2015. Jack Ma even predicted that traditional brick-and-mortar sector will be replaced by the online stores. This research intends to first help Wanda department stores to identify the influences of online stores. Then, based on the successful development experience of British department stores industry, the feasibility of creating own-brand to help Wanda department stores to reduce the influences of online stores will be analyzed. This research finds three influences of online stores to Wanda department stores which is the objective one. First is the elicitation of homogenous issues of Wanda department stores. Second one is the low consumer switching cost to shop online. Third come to the high utilitarian value of online stores. From the findings of objective two, it is possible for Wanda department stores to create their own-brands, and own-brand product can reduce those three online influences identified in objective one. Wanda department stores can differentiate themselves and get ride of homogenous issues with the existence of competitive own-brand products. Besides, if Wanda department stores establish own-brands, Wanda department stores can provide greater financial switching cost since they control the price and products, and greater relational switching cost because they can control front-line sellers and take measures to reduce the turnover rate of those sellers which would in turn create better relationship with consumers. In addition, after creating own-brands, Wanda department stores can