Carrefour's Strategies in China

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Case Details:

Case Code : BSTR246
Case Length : 30 Pages
Period : 1995-2006
Pub Date : 2007
Teaching Note : Available
Organization : Carrefour
Industry : Retailing
Countries : China

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Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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The 'Great Mall' of China Contd...

Till the 1980s, the retail industry in China was fully controlled by the Government. The department stores run by the Government provided little in the way of conveniences. According to Wang Zhirong, General Manager of Tian Bai department store in Dalian, concepts like customer service and choice were unheard of. She said, "It didn't matter how you did your job, when customers came they had to wait until the shop assistants were in a good mood before begging them for help."⁷

Carrefour entered China in 1995, when the Chinese Government had partially opened the retail sector.

The country's economy was in the growth phase and the urban consumers were shifting their preferences from the wet markets⁸ and state-owned stores, to foreign retailers like Carrefour which provided convenience along with a wide range of products in hygienic surroundings (Refer to Exhibit II for retail industry in China).

Carrefour went on to strengthen its position in the country and by 2005; it had emerged as the sixth largest retailer in China. It was also the largest foreign retailer in the country (Refer to Table II for the leading retailers in China in 2005).

According to Beijing-based CTR Market Research⁹, Carrefour was the major retailer in 15 of the largest cities across China, with a market share of more than 5%.

Between 2006 and 2010, Carrefour projected revenue growth of above 20% in China per annum and planned to open about 80 more hypermarkets in the country by 2009...

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7] Rebecca MacKinnon, "China's Reforms Produce Winners, but More Losers," www.cnn.com, October 1999.

8] In China, wet markets can be found all across the country. These markets sell fresh fish, chicken, and live mammals and reptiles, generally in an open environment.

9] Founded in 1995, CTR Market Research is the leading market research company in China. CTR provides different services that include interpretation of information, market segmentation, advertising, media research, and business research.