Small-Format Stores Represent Opportunity for Propane in China

As e-commerce players like Alibaba and JD.com put pressure on China's brick-and-mortar food retail sector, traditional retailers are introducing a wide variety of store sizes, formats, and layouts to stay competitive.

This, in turn, is heavily influencing the stores’ refrig- eration equipment needs, opening up opportunities for natural refrigerant systems like propane (R290) cases, according to attendees at ChinaShop 2019. The trade show, held November 7-9 in Qingdao, China, is China's biggest exhibition for the food retail industry.

One of the largest opportunities for natural refrig- erant systems is in the "community food store" market segment. Ranging from 6,458-10,763ft² (600- 1,000m²), these stores are usually smaller than traditional supermarkets, and are located near residential areas. The stores focus on carrying fresh and frozen foods as young people become more accustomed to ordering non-food items online.

"This is one of the fastest growing market segments, and it is where we see the biggest opportunity in the future for our propane cabinet sales," said TingXun Zhang, Director of Cold Chain Research Institute for Chinese OEM Zhejiang XingXing Refrigeration. The company had several pieces of R290 plug-in equipment on display at its ChinaShop booth.

One Chinese retailer that has successfully implemented R290 equipment is SPAR China (a division of Dutch retail giant SPAR), which was also present at the exhibition. “R290-based equipment is quite commonly used among our members, and has already produced very good results,” said Junbo Chen, Marketing and Communications Director for SPAR China.

Several SPAR China group members like SPAR Beijing Huaguang have installed R290 equipment supplied by AHT Cooling Systems (Changshu), a division of Austrian multinational refrigeration system manufacturer AHT. In addition, SPAR Sichuan Dehui recently installed several AHT R290 island freezer chests at its new store in Chengdu this past summer.

Chen added that SPAR China is “seeing a growing need for R290-based equipment, as it has a more stable market price compared to hydrofluoro- carbon (HFC) and hydrochlorofluorocarbons (HCFC) systems,” although ensuring appropriate and thorough maintenance remains a concern.

This article was originally published in the January 2020 issue of Accelerate Magazine.