A few months ago, Migros moved into the Chinese online business and is selling there under the label “Orange Garten”.
The China business started well for Migros, as local customers seem to like its products, even though the prices for exactly the same products are often much higher than in Switzerland. In some cases, there is a difference of around 600%.
According to Migros, the higher prices are due to transport, marketing, distribution costs and the included home delivery. But Patrick Kessler, President of the Swiss mail-order business thinks there are more reasons: Quality is very important for Chinese customers and they are willing to pay for it and Swiss companies in China are testing how high they can go with their prices. Other Swiss manufacturers also overcharge Chinese customers for their products, but the difference isn’t as extreme as in the case of Orange Garten/Migros.
In regards to Marketing, Migros does everything right in China: It presents itself as a company with tradition as well as an emphasis on high-quality products, sustainability and environmental protection. These seems to justify the high prices for Chinese customers which most likely have no idea of the original prices.
