The supermarket revolution was sweeping through Asia. Consumers were switching from traditional street stalls and outdoor markets for fresh food, known as “wet markets,” to supermarkets and hypermarkets. From India to China to Indonesia, buying patterns were changing, powered by economic development, rising incomes, urban growth, and improved transportation. Supermarkets offered consumers the transparency of posted prices instead of bargaining and the convenience of one-stop shopping instead of a search among many specialized vendors. Supermarkets also featured packaged goods, branded products, imported foods, modern sanitary conditions, refrigeration, and prepared foods.

Dairy Farm was perfectly positioned to participate in this supermarket revolution. The company had withdrawn from operations in Australia, Europe, and New Zealand to focus on Asia. The company had divested distribution and other businesses to concentrate on supermarkets, hypermarkets, drugstores, and convenience stores. Having weathered the earlier Asian financial crisis, Dairy Farm braced itself for increasing costs and intensified competition. CEO and managing director, Ronald J. Floto, noted at that time: “We have been picking the low hanging fruit and it's going to get tougher rather than easier … Every one of our markets is troubled; that represents another challenge.”

Dairy Farm, headquartered in Hong Kong, was a unit of the conglomerate Jardine Matheson Group. Despite the forces of the supermarket revolution, the company still faced tenacious competition from traditional wet markets and mom-and-pop grocery stores, as well as from domestic supermarket chains in its target country markets.