Should Giant TMC Berhad Enter Australian Market?

Is the Supermarkets and Grocery Stores Industry in Australia a growing and huge market?
Yes
Should Giant TMC Berhad enter Australian Market?
No.
The Australian Supermarket and Grocery stores Industry is an $88.1 billion per annum industry, with a steady annual growth it seems very lucrative to foreign investors and other companies of the same industry but the harsh reality is the industry is not very welcoming. Giant TMC Berhad which has a huge market share in various countries but in this competitive Australian segment it will be very difficult for them to enter and sustain. The Industry is a Red Ocean Market, entailing that it’s a fiercely competitive market. The top 4 companies in this industry cover over 90% of the market share (IBIS 2016)

The main aspect that they have to focus on is how to penetrate the market and gain a considerable share. There are various forced and unforced barriers to entry into this sector, especially for a foreign force or entity. The hurdles that Giant will face in the Australian market can range from expensive franchise licensing, lack of big and prime retail spaces and the worst of all the dominance of existing players because of the wide product lines and competitive price variations (IBIS 2016); pose a significant threat to Giant even starting out in Australia. After overcoming and sustaining these barriers Giant has to face the wrath of the industry competition both internally and externally. The internal competition comes from the major players of the Industry like Woolworths and Coles with regards to the prices of each product, the price band for each product line and organizing oneself to suit and match the consumer’s trends and dynamics. The buying trends in Australia are changing and the consumers are leaning towards healthy and organic food, private labels and fresh produce that’s conveniently available and thus Giant have to focus on these trends and demands. As we are looking and dissecting in a macro-environmental fashion we have to consider the external competition as well, the biggest

The Australian supermarkets and grocery stores industry is very keen on inculcating technology in their day to day operations and also for their back end support. A good example to illustrate the gap in technology between the Malaysian and Australian supermarkets is the Self-Checkout Counters, they have been in Australia for quite some time and are now evolving but for Malaysia this is a new concept altogether. The Australian Companies are investing more and more in technology to make the shopping experience easy, refreshing and fun for its customers. Currently Coles, one of the leaders of the industry in Australia is working along with IBM to install radio tags on each item and this will drastically reduce the checkout time (http://www.heraldsun.com.au/technology/news/smart-phone-to-avoid-queues-in-supermarkets/story-fn7celvh-1226410624726). This integration of technology to attract more customers and make their shopping experiences better will be very crucial for them to gain more market share (IBIS 2016), thus Giant have to focus on this from the very