Thomas Woo, president  of city'super Group, on the retail chain's first anniversary in Shanghai

Q: What does city'super's one-year anniversary in Shanghai mean to you?

A: Our group is also celebrating its 15th anniversary in Hong Kong this year. When city'super first launched, it was sort of like a start-up company; it had to figure out what customers preferred, and so on. We really did not foresee that we would grow by more than 15-20 times – in terms of how many outlets we have – and become a multi-brand company. So, as we celebrate our first year in Shanghai, it leads us to think, what will happen in the next 15 years? The only thing that will hold us back are the limits of our imagination. We're very excited about our future journey in the Shanghai market.

Q:  What were the biggest challenges that city'super faced in its first year in Shanghai?

A: Our biggest challenge has been to really understand our customers and their lifestyle, while also maintaining the city'super concept. Adapting to the Shanghai market will be a continuous process. It's our first year – and even though our staff is comprised of locals as well as people from Hong Kong and other countries – we're new in town. It will take more than one year to adapt and get our foundation right.

Q: What is the biggest difference between Hong Kong and Shanghai customers?

A: In Hong Kong, about 30% of our customers are expatriates and 70% are locals. The composition is similar in mainland China. But Hong Kong is at a different stage of economic development, so a lot of customers are already quite used to knowing what kinds of products they want. It also helps that we've been interacting with our Hong Kong customers for 15 years. We know what they want and what we can offer; and customers even often tell us what they want. In Shanghai, we still need time to build that relationship. The expatriate group of customers has similar product and service needs to those in Hong Kong. But for local Chinese, we found that some of our Shanghai customers expect more high quality, regional specialties from all over China. That's not emphasized as much in our Hong Kong stores, which carry more items from North America, Europe and Japan.  So, very soon after we opened in Shanghai, we had a team travel around China to seek out safe, healthy and high quality regional items.

Q: What kinds of regional products are they looking for?

A: People have been interested in things like Guangdong soup, which is famous for being good for your health. But many Shanghainese people don't know how to cook it, so we've been sourcing soup packages from Guangdong and there has been an amazing response. We've also brought specialty snack products from Sichuan, like beef jerky. I think this has worked particularly well in Shanghai since it is a melting pot of people from all over the country.

Q: Food safety concerns have been increasing in China recently. How has this affected city'super?

A: These kinds of cases in China aren't really new, it's been happening for many years.  Even before we started our business in Shanghai, we had a quality assurance team checking all the products that we carry. For each vendor – particularly with fresh foods – we will actually visit their farms, even if they have quality certificates. From day one, we have been conducting our own tests to ensure that they're up to city'super standards. The interest in China for high quality, safe food, is very important.

Q: What is city'super's digital marketing strategy in China?

A: Right now in Shanghai, we have our website and we're planning on rolling out online shopping services by the end of 2012. But before venturing into virtual shops, our main focus is to first build our physical brick and mortar store presence here and understand mainland customers more. 

Q: Would your online shopping services reach all of China?

A: We want to serve pretty much the whole country, but that depends on the kinds of products and logistics. Obviously, transporting fresh foods to faraway provinces is difficult, but packaged products can be shipped. There will be some differentiation in our product offerings to different places.

Q: What are city'super's expansion plans in mainland China?

A: We prefer a step-by-step method, even though we've had requests from all over China to open stores. We picked Shanghai as our first city because it's a big city with great potential and it's still growing rapidly. We have to focus on building our presence and business foundation here first; it will be the base for our China expansion in the future. We plan to have four city'super stores in Shanghai in the next three years. We will also introduce other brands, like Log-On – a trendy lifestyle store – next year.

Q: Where will your next store in Shanghai be?

A: We're looking at a few locations in Puxi. Most companies open up there first, but we chose Pudong because of timing. We were really impressed with the vision of Shanghai IFC Mall in Lujiazui. One of our stores in Hong Kong is in IFC Mall too, and we've seen the benefits of being located in a financial area.

Q: How would you describe city'super's brand recognition in mainland China?

A: As a new brand in Shanghai, we continuously need to build up our brand and trust with customers. That takes time; when you meet new friends, you don't gain their trust right from day one. The surprising thing was that, even before we opened, a lot of customers in Shanghai knew about us. Many local customers recognized city'super and said, "Oh you're finally here." I think that's because many mainlanders travel to Hong Kong on a regular basis. Last year, 22 million tourists from mainland China visited Hong Kong – three times the region's population. That said, we're not known to everyone in Shanghai yet. We're known among our target customers – those who have some specific expectations of what they eat.