A Comparation Analysis for Predicting Potential Retail Market Using Huff Model in China and Korea

Purpose: This study aimed to compare the predict retail sales of local markets in Mid-sized city of China and Korea with the Huff model. Using the Huff Model, we examined whether the predicted retail sales of local markets may be different in city of China and Korea from the stores. Design/Methodology/Approach: The probability that a customer shops at location depends upon the store size and the travel time factors calculated by the Huff Model. Therefore, people in a mid-sized city are more sensitive to store size, because a bigger store size means greater opportunities, incentivizing consumers to travel further to competing stores after passing by nearer, smaller stores. Our study is designed to use the Huff model for estimating the λ (λ=2) in the mid-sized city with store and to examine where the different potential retail market between city in China and Korea. Findings: We found that the predicted retail sales of shopping malls have a greater value than others. People who live in a mid-sized city may have easier access to any stores within the city boundary than people in metropolitan areas. Research limitations/implications(if applicable): This study has some limitations. First, the data is somewhat restricted in that the subject stores do not represent all of the stores in city of China and Korea. Second, we cannot compare the estimated market share of all of the stores in city of China and Korea and the actual sales data. Originality/value: It is further suggested in this study that more databases be developed throughout such Asian countries as Japan and that a different parameter value in the Huff Model be utilized for λ mid-sized cities.