The Chinese market as an opportunity to innovate distribution strategies?

Abstract

Purpose The purpose of this paper is to analyze the distribution strategies implemented by foreign firms in emerging markets, and to investigate whether they represent an opportunity for firms to innovate their practice. China is selected as the setting of the investigation as distribution is a critical determinant of business success for international firms operating there. Design/methodology/approach A multiple-case study approach is adopted by investigating the distribution strategies of four Italian firms in China. The collected data consist of interviews with firm managers and their distributors. To ensure triangulation and cross-verify the findings from the primary data, secondary data consisting of sector reports and newspaper articles were analyzed. Findings Results discuss how foreign firms develop their distribution system in China and suggest that emerging markets can enable reverse innovation in their distribution strategies. Research limitations/implications The research suffers from the limitations of the generalizability of the findings as the study was carried out on a restricted number of firms, and it considered their strategies in one single market. Practical implications Managerial implications are discussed on the extent to which the Chinese distribution system still represents a key issue for foreign firms, but it also provides with opportunity for innovation. Originality/value While previous research on innovation in emerging markets has mainly focused on product innovation, this study suggests some areas for distribution innovation.