The CPG retail landscape in emerging markets is fragmented, dynamic and innovative. The big-box retailers only represent around 50% of many emerging markets while these tiny-in-size-but-enormous-in-numbers nanostores (mom-and-pops) keep strong foothold of the rest. As India was the nightmare of modern retail in the past decades due to strict FDI restrictions, China has already set the ceiling of modern retail in the CPG sector. Meanwhile, the dwarf-in-share-but-mighty-in-influence e-commerce has brought many operations innovations which fundamentally challenge the retail supply chain.
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Publications
Jiwen Ge, Dorothee Honhon, Jan Fransoo, Lei Zhao (2021). Supplying to Mom and Pop: Traditional Retail Channel Selection in Megacities. Manufacturing and Service Operations Management 23(1):19-35.
We study whether CPG manufacturers should use direct channel or wholesale channel to sell to a cluster of nanostores in an emerging-market neighborhood over a finite time horizon. We show that there are four optimal strategies: direct only, wholesale only, direct then wholesale, wholesale then direct.
See this Linkedin article for the insights of this paper.
2. Jiwen Ge, Dorothee Honhon, Jan Fransoo, Lei Zhao (2020). Manufacturer competition in the nanostore retail channel. European Journal of Operational Research, 286(1):360-374.
We study two competing CPG manufacturers' pricing and sales visit strategies to sell to a subsistence nanostore. We show that the two manufacturers can mutually benefit, that is, instead of jeopardizing each other through competition, they contribute collectively to satisfy the nanostore family’s subsistence needs such that nanostores are more likely to survive .
3. Jan Fransoo, Rafael Escamilla, Jiwen Ge (2024). Nanoretail operations in developing markets. TutORials in Operations Research (Vol. 2024).
We characterize the empirical context in the nanostore operations and the supply chain. We elaborate on modeling operations execution and operations strategies to expose critical tradeoffs that are distinct from those in organized retail in developed markets. We also discuss how to conduct research in this retail segment and provide examples of novel contexts and business models that may open up new areas of nanoretail research.
Papers under Review
Jiwen Ge, Brian Tomlin (2024). The Manufacturer's Role in Nanostore-Supermarket Supply Chain Competition. Seond round major revision (with minor adjustments expected) at POM.
Yang Zhan, Zheng Zhang, Jiwen Ge (2023). Value of Exclusive Doorstep Delivery in the Last-100-Meter Distribution. Under revision for second round review at Management Science.
Jiwen Ge, Dorothee Honhon, Jan Fransoo, Lei Zhao (2023). Selling to Nanostores: Optimal Sales Effort in Traditional Retail. Reject & Resubmit at Management Science.
Work-in-progress
1. Jiwen Ge, Dorothee Honhon, Jan Fransoo, Lei Zhao (2020). Connecting through Nanostores: Optimal Network Scale of On-demand Retail Platforms.
2. Ge and Zhang (2024). Competition between Nanostore and Convenience Store Supply Chains.
3. Ge and Zhu (2023). The Role of a Fulfillment-capable Platform on Manufacturer Competition.
4. Ge and Ozbilge (2024). Consumption Flexibility and Food Waste.
Pictures
Two nanostores in one Hutong street in Beijing, pic in 2015
Direct distribution of a beverage manufacturer in the campus of Tsinghua, pic in 2015
An ice cream manufacturer delivering to one nanostore in Beijing, pic in 2015
Shelf of a nanostore in Beijing, pic in 2015
A local distributor serving lower-tier wholesalers (as shown in the next picture) and big retail stores. The warehouse is fully stocked with cartons, reflecting significant channel stuffing by upstream suppliers; picture taken in 2015.
A wholesale market in Beijing, hosting a couple of dozens of small wholesalers serving local nanostores and nano-restaurants. Pic in 2015
Me sitting on an e-tricycle of a wholesaler in Beijing, pic in 2015
A depot and a delivery e-tricycle of Shequ001, a failed on-demand retail platform startup in Beijing, pic in 15
A JD.com pseudo franchise nanostore in Dalian, pic in 2019; the store owner was planing to quit and claimed the new products introduced by JD.com had no market and the unsold units could not be returned
Congestion of delivery trucks at the receiving docks of a local supermarket in Shanghai, pick taken in 2015
A fire at Plukon Food, the largest poultry processing factory in the Netherlands in 2017 starved AH for weeks; the fire also discontinued my bachelor student's data collection at one of its production lines
A large-scale recall for Fipronil-contaminated eggs in 2017. We could not buy eggs in the Netherlands after vacation from Southern France.
A FreshHema store employee picking an on-demand order products from a drawer which says "online order reserved" ; after order pick, the bag was hung on a suspended conveyor chain to the back office for packaging and delivery, pic in 2019
JD Daojiao croudsourcing freelancers waiting for on-demand order dispatch at a Walmart in Dalian, pic in 2019
The Cainiao package self-pickup and return point in my former community; packages are dropped by numerous couriers in batches often without consumer consent, pic in 2019
Ecologist Yonggeng Li demonstrating the chicken feeder designed by himself and printed by additive manufacturing. Pic taken in 2022 in Inner Mongolia.
Hong Xu, an ecologist from the Institute of Botany, Chinese Academy of Sciences; in the pic, she is picking eggs. Pic taken in 2022 in Inner Mongolia.
A picture of Yonggeng Li and me in Inner Mongolia in 2022. The dark patch in the background is a dead volcano.
An ecological experiment to study the sustainability of chicken farming to substitute traditional cattel farming in Inner Mongolia. Pic taken in 2022.
I gave a presentation on sustainable agriculture and supply chain at an ecological conference in 2022. The conference was held in a yurt, a traditional portable Mongolian dwelling.
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