CARREFOUR’S STRATEGY IN CHINA
Study and analyze the entry and expansion strategies of Carrefour in China
The Chinese market, along with Brazil, India and Russia, is one of the fastest growing markets in the world. It is the country with the largest amount of consumers.
250 cities with population over 1 million and a steady rise of living standards…
For the mass-market retailing, China offers limitless opportunities; more than for any other market segments.
The challenge in China is that with this big population there is a wide range of diversity.
Because of these differences, it is very important for businesses wanting to enter China to work with ...view middle of the document...
Moreover, at that time, the market was not well explored by researchers and international companies, which could give a reliable advice on Chinese customers’ tastes. As a result, at the first stages, Carrefour was exploring the market, observing customers’ behavior and correcting existing marketing strategies.
Before entering China, Carrefour was operating in Taiwan for 7 years. This experience largely helped the company to suite new customers tastes as long as both Eastern cultures are quite similar.
In 1995, foreign investors could not directly operate retail stores. Therefore, the company entered the market as a local partner of Shanghai Hualian Company, which had close relationship with government at that time.
This “partnership” led to rapid expansion of Carrefour in Shanghai
The company also formed a joint venture with Zhong Chuang, a Chinese management consulting firm. They established a firm called Jia chuang that managed the hypermarket in Shanghai, named Chuang Yi Ja but as Carrefour had a major part in running and managing the store, the signboard had the name Carrefour displayed on them.
After its entry into mainland China, Carrefour grew quickly and opened 100 stores within 12 years. In the year 2006, Carrefour employed 40,000 people in China (98 % were Chinese) and served about 300 million Chinese customers per year. Carrefour is seen as the number one French employer and currently buys its products from 22,300 local Chinese suppliers.
Carrefour China market entry strategy was primarily to target first-tier cities, which were not saturated with numerous producers at that time. Location plays an important role in market...