At the intersection of Warm Springs just off highway 580, there are three Asian grocery stores: Ranch 99, Osaka Japanese Market, and 168. Essentially, in Fremont, there is an over saturation of Asian grocery stores that keep popping out of nowhere. Why is this a thing?
Illustrated by Madison Chun
By Lucy Yao, Ananya Biswas, Emma Lin
Just off highway 580 in Warm Springs, three major plazas are centering around grocery stores: Ranch 99, Osaka Japanese Market, and 168. At first, it doesn’t seem odd given the circumstances. Each is centered around different cultures and this area is located at a transfer point between two major highways. But what makes it especially interesting is all three of these shops are East Asian supermarkets, and all of them are just down the street from each other.
This phenomenon seems unusual, but it’s fairly normal. A person may be venturing into their favorite plaza when suddenly they spot three pizza places right next to each other. Or maybe it's a group of martial arts classes, fast food restaurants, Boba shops, or hairdressers.
Although there have been East Asian supermarkets in the area before, the recent rise has left customers wondering not just why there are so many, but also which ones to go to. Due to increasing interest in Asian culture and pandemic-driven technological advancements, this leaves both new opportunities and problems for these competing businesses.
Social sciences have previously described this phenomenon as spatial economics, which describes how economic competition, limited resources, and locations combine. It is the answer, both to why the East Asian supermarkets have shown up next to each other and to why the hypothetical pizza places or hairdressers may decide to set up shop in the same area.
For this specific seemingly unnatural situation, it can be explained by Hotelling’s model of Spatial Competition. In this model, it is revealed that somewhat counter-intuitively, the most economically solid decision often is to place a similar shop right next to its competition. By placing itself next to its opposition, a shop places into stark detail the benefits of shopping at itself rather than any other option; it showcases any differences in ambiance, price, or quality; and it successfully finds itself one of the few locations which are available and frequented by customers.
Over time, the desire for East Asian culture has grown in the US. This is especially so in California, which saw a large influx of Chinese immigrants during the building of the railroads in the 1960s, and is 15.9% Asian, according to the 2021 US Census. This effect is even stronger in the Bay Area, which is not surprising since the Bay Area is 27% Asian according to current estimates from news articles (the 2010 Bay Area bicentennial census records the population as 23.3.% at the time).
Fremont is an entirely different ballpark, being 61% Asian, according to World Population Review. These statistics are imprecise in some ways since it is hard to know how much of the Asian population is East Asian specifically, but it’s still easy to understand how any trend related to Asian culture could thrive in Fremont.
Previously, that specific area had East Asian Markets: Ranch 99 and Marina, which were located in two of the same plazas as now. However, just before the pandemic, a third plaza that hosted the department store Ross went bankrupt, leaving the entire plot open. Ranch 99 proceeded to move locations here as it offered a bigger venue where it then reopened in September 2021. Osaka proceeded to open up in the place where Ranch 99 was in November 2021. At the same time, Marina went bankrupt, which led to the opening of Market 168.
With these markets only recently opened (in the middle of a pandemic as well), most of these businesses have yet to face the increased competition of the post-pandemic world and the new expectations that are required.
With the impact of the pandemic, combined with this new source of competition, it can be harder for older East Asian supermarkets to get by which is why many have been replaced.
Its lingering effects mean that more and more shoppers expect to at least get an option to shop online. From there, they can also see other people’s opinions on their shopping experience at those stores, and their decisions will likely be influenced by the positive or negative reviews they see.
Convenience and options provide the outline by which customers shop. The supermarket which can make a seamless website and straightforward ordering process, while maintaining quality, will surely thrive. But it can be hard for older businesses to manage that, and competition only makes it worse. A scorned customer has many other shops waiting to welcome them should they choose to become an ex-customer. Never before has customer retention been more vital for Fremont’s East Asian supermarkets.
Like the hypothetical pizza places in Hotelling’s model, the path towards survival, and, in fact, profit for any shop in this situation, including the East Asian supermarkets, is to stand out more. Many of them are attempting to do so by revamping the grocery store designs, focusing on specific cultures, and deciding over price versus quality.
Many supermarkets employ general strategies to get customers to buy more when they’re shopping. For example, they may give out free samples of food to entice customers into buying food or take advantage of a polite instinct to repay things given to them, even if they’re free. They also tend to place impulse purchase items, such as gum or candy, on shelves near the checkout stations so that while a customer is waiting in line, the items will always catch their attention of customers.
Particularly for these East Asian markets, many heavily rely on the miniature plazas found within the markets. Customers are given coupon codes that they can subsequently spend on interior bakeries, brunches, or other food stores.
Each market may have its bakery and general kitchen, but the other shops within vary. For 168, it’s the longstanding Boba shop in the front of the store called “Tea Island”. Ranch 99, it’s a culmination of Asian restaurants, ranging from a Taiwan street snack store to a full-on bar.
However, this doesn’t change the fact that many East Asian grocery stores sell overlapping items, forcing these new stores to rely on specific marketing to appeal to a wide scale of customers.
For example, Osaka Japanese Market specifically focuses on its Japanese origins, importing goods from Japan that would otherwise be hard to locate. This includes a section at the front of the store dedicated to Japanese makeup, skincare, and toys.
“[There are] no Japanese markets in the East Bay,” Osaka manager Mina said. “We are [also] increasing online exposure to gain new customers ... who love Japanese food and culture.”
Although each market plaza seems similar, each has its specialty and specific marketing tactic that it relies on to attract customers. In an area with such high demand for East Asian culture, instead of competing, multiple markets are a necessity to keep the customers satisfied. Now, many stand thriving through their appeals of variety, familiarity, or quality. However, as the world increasingly moves towards an online landscape, it's unsure just how long this current model will last.