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Last updated at: (Beijing Time) Wednesday, March 31, 2004

No easy way to win in China: Carrefour

French Carrefour, the world's second large retail chain store group, recently opened its 42nd outlet in the Chinese mainland and also its first one in Urumqi in northwest China. This supermarket has a total investment of 20 million USD with Carrefour taking up 65 percent shares.


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Super market opend in northwestern China
French Carrefour, the world's second large retail chain store group, recently opened its 42nd outlet in the Chinese mainland and also its first one in Urumqi in northwest China. This supermarket has a total investment of 20 million USD with Carrefour taking up 65 percent shares.

Carrefour has so far made its presence in 22 cities in the Chinese mainland with more than 23 thousand employees. It has made Shanghai its headquarters for its global procurement in China and set up 10 procurement offices in 10 cities in China.

Evidently Carrefour attaches great importance to the bridgehead in the northwest China. This can be proved by the presence of Mr. Shereau, general manager of Carrefour China at the opening ceremony of the outlet.

To the question about how retailing business should deal with the fierce competition, Mr. Shereau answered: " China represents a huge market when it has acquired its WTO membership. But it's no easy way to stand out a winner here.


Carrefour opens flagship store in Beijing
China is nearly as big as Europe and each area differs from any other. We have to keep on learning something new. We must know customers' wishes and expectations, therefore offering them more added values. We welcome competitors. Competition brings practical benefits to customers."

Carrefour purchased 1.6 billion worth of goods in China in 2002 and 2.15 billion in 2003. Meanwhile, it had problems such as opening shops against the regulation and faked goods. About this, Mr. Shereau said: " Sometimes we may have problems in understanding Chinese laws and regulations. But we always respond positively to the government's requirements when problems arise, by rectifying our operation to make sure that the law is fully observed."

He went on to illustrate Carrefour's various campaign on public welfare to show his company's attitude, including support to Beijing's bidding to host Olympics, Shanghai's bidding to the World Expo, setting up Hope primary schools, donation to disaster-hit areas and emergent donation of masks during the SARS outbreak, etc.

The step-in of a supermarket will undoubtedly bring great pressure to local retailers. Mr. Shereau did not avert this question. He explained, " under the same market condition, we bring benefits to local residents by reducing costs through efficient management.

Yes it will constitute pressure to some small businesses, but it is a natural outcome of market competition. In effect, every time when we enter into a new city, we not only foster a large number of local talents, but also help our partners improve their operation and stop making loss."

In the game between retailers and suppliers, hypermarkets have more say because of their wide-spread sales network linking end customers. Besides bargaining hard for low quotes, they have begun to make products with their own brands.

Mr Shereau commented: "Suppliers will also squeeze retailers' profit margin when they are more powerful. However, there are very few frictions, which are mostly settled through negotiations. In fact, suppliers also look forward to taking the advantage of our selling network to enter into other cities or even the international market. Otherwise, it will be more difficult or costly if they do it by themselves."

When asked at the end of the interview to say something about his company's strategic goals in the future in China, Mr. Shereau smiled : " It was evidently impossible for me to foresee our success in China now ten or twenty years ago. By the same token, I just dare not give any predictions in a booming Chinese economy."

By People's Daily Online


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