Stampeding to Regulation

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While foreign retailers are making inroads in China, harsh lessons are being learnt when things go wrong and consumers react in unexpected ways. Xinhua reports on a tragic accident – and the rush to regulate:

    “China’s Ministry of Commerce issued an urgent circular on Monday banning time-limited sales promotions in shops following a deadly stampede at a Carrefour outlet.

    Three people died and 31 were injured in a stampede triggered by a sales promotion at a Carrefour outlet on Nov. 10 in the country’s southwestern Chongqing Municipality.

    The three-day promotion at a hypermarket in the city’s Shapingba District was launched to celebrate the 10th anniversary of the French retail giant’s entry into the city.

    The shop offered an 11.5 yuan (1.5 U.S. dollars) savings from the original price of 51.4 yuan for a five-liter bottle of edible oil. When it opened its doors for business throngs of people swarmed in and a mass stampede began. “

Swarming consumers are, of course, not restricted to China. Mad scenes around store and product launches can just as easily be found in London as in Chongqing. However, while it is clear that foreign retailers (and other businesses) in China have to take care when making plans and anticipating customer behaviour, it also seems that they must keep an eye on regulatory reactions. As noted before, policy and regulation can change quickly.

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