Carrefour's Strategies in China
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Case Code: BSTR246 Case Length: 30 Pages Period: 1995-2006 Pub Date: 2007 Teaching Note: Available |
Price: Rs.500 Organization: Carrefour Industry: Retail Countries: China Themes: International Business, Globalization Business |
Abstract Case Intro 1 Case Intro 2 Excerpts
The 'Great Mall' of China
In 2006, France-based Carrefour Group (Carrefour), the second largest retailer in the world, successfully completed eleven years of its operations in China. As of September 2006, Carrefour operated in China through its 80 hypermarkets4 and around 250 hard discount stores5. China was Carrefour's sixth largest market, with sales of over €6 2.06 billion in 2005.
Being one of the first foreign companies to enter the Chinese retail industry, Carrefour played a major role in bringing about a retail revolution in the country.
It leveraged on its experience in the international markets and introduced a few of its global best practices into the Chinese market.
Carrefour had adopted a decentralized management structure, where all store managers in China operated stores with complete freedom. Carrefour sold private label products and designed the stores according to the convenience of Chinese customers.
By procuring the majority of its products locally, Carrefour was able to ensure their freshness, an attribute considered important by Chinese consumers.
In China, where vast economic, social, and cultural differences existed among different provinces, Carrefour was able to cater to the needs of different customers successfully.
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."
Carrefour entered China in 1995, when the Chinese Government had partially opened the retail sector. ...
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