Carrefour in Taiwan
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Case Code: BSTR281 Case Length: 15 Pages Period: 1989-2007 Pub Date: 2008 Teaching Note: Not Available |
Price: Rs.300 Organization: Carrefour Industry: Retail Countries: Taiwan Themes: International Business, Globalization Business |
Abstract Case Intro 1 Case Intro 2 Excerpts
"(The company) treated the Taiwan experience as Carrefour's laboratory not only for China, but all Asia."
- Eric Deliers, Regional Manager, Carrefour China, North Region in 2006.
"Carrefour has not only made money in Taiwan, it has also won the hearts of the Taiwanese people."
- Annette Lu, Vice President, Carrefour Taiwan, in 2004
Introduction
In 2007, France-based Groupe Carrefour (Carrefour), the second largest retailer in the world, completed 18 years of operations in Taiwan. Taiwan was Carrefour's first Asian venture and as of 2007, the company was one of the leading retailers in the country, with 48 hypermarkets. Taiwan was Carrefour's eleventh largest market with sales of over € 1.391 billion in 2007. Carrefour entered Taiwan in 1989 through a joint venture with a local partner - Uni President Enterprises Corporation5 (Uni President) - after the retail industry was partially opened up for foreign investment.
Initially, Carrefour had planned to use the strategies it followed in France and other European countries in Taiwan as well, but it soon realized that there was a significant difference between the behavior of Taiwanese shoppers and that of shoppers in Europe; the Taiwanese shopped more frequently and in small quantities, and were extremely price conscious. Carrefour then decided to adopt a more localized approach, and brought about changes in store design, store management, and merchandise. It introduced several private label products, and entered into sourcing agreements with local suppliers so that its products, especially fruits and vegetables, were fresh.
By the early 1990s, it had managed to establish itself firmly in the Taiwanese market and, by 2005, had emerged as one of the top retailers in the country. Carrefour later used its experience in Taiwan to enter other Asian markets such as Malaysia, China, Thailand, Singapore, and Indonesia. However, in the mid-2000s, Carrefour found itself facing some difficulties in Taiwan due to adverse market conditions. While announcing the results for the second quarter of 2006, Carrefour said, "The tightening of credit in Taiwan continues to weigh on consumer confidence, which is at its lowest point since 2002." Also, competition was intensifying with local players emulating Carrefour's strategies and business model...
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