Carrefour was established in 1959 in France by the Fournier and Defforey families. In French, it means “crossroad or intersection of thoughts and ideas”. It aims to integrate the concept of a large department store and the self-service concept. There are four main types of Carrefour stores: hypermarkets, supermarkets, hard discount stores and convenience stores.
Carrefour entered China in 1995 and opened the first Carrefour hypermarket in Beijing Nationl Exhibition Center. After a decade of its operations in China, Carrefour has achieved turnover of around US$2 billion in 2005, making China the fifth largest market for Carrefour.
Some of the issues of concern for Carrefour are:-
• Implications of Carrefour’s buy-out efforts
• Plans to strengthen its position in the Chinese market
• How to maintain its achievements in China
• Further expansion into second-tier cities in the inland regions which Carrefour lacked pressence
2. Discussion Questions
A. What are the factors behind Carrefour’s success in the Chinese retail markets?
A comprehensive market research and analysis of the Chinese economy and retail market before entering China. Ths foresight allowed Carrefour to gain a first-mover advantage among other global foreign retailers.
Carrefour first established a joint venture company, Jia Chuang Business Management Company (CMBC) with Zhong Chuang Business Company (ZCBC). This allowed Carrefour to avoid the restrictive government’s control and regulations. In addition, leverage on the a local partner’s knowledge, expertise and networks.
Rapid expansion by targetting at newly emerged middle class with high purchasing power in the leading economic centres, Shanghai and Shenzhen.
Responsive and efficient supply chain strategy. A centralized procurement system that is integrated with its Global Procurement System, under the direct control of Carrefour’s headquarters in France....