Compare and Contrast the Strategies of Carrefour and Wal-Mart in the Chinese Market
Compare and contrast the strategies of Carrefour and Wal-Mart in the Chinese market
A recent article (Liu Jie, 2008) revealed that restrictions on business numbers, geographical positions and stockholders have been gradually diminished, which can be regarded as a supplement to promises to WTO. As a consequence of market liberalization, foreign retailers have gained rights to compete with domestic companies in Chinese market. Over recent years, Chinese market has appealed the booming entry to external retail chains and has become a fierce competition region for both foreign and internal companies, including Carrefour and Wal-Mart. Carrefour and Wal-Mart are well known worldwide largest retail giants recognized as France and America based companies respectively and are battling for the reputation of being the largest foreign retailer in Chinese market with increasing amount of outlets and sales( Moreau and Raphael ,2008). The purpose of this essay is to compare and contrast tactics of Carrefour and Wal-Mart in Chinese market.
Expansion to Second -tier cities
Having faced saturation of marketplaces in first –tier cities, such as richer coastal districts, both Carrefour and Wal-Mart adopted the strategy in 2007 of expanding their hypermarkets into interior regions in China where market development potential and urbanization trend are highly evaluated(Liu Jie, 2008). For instance, stores of Carrefour in second-tier regions account for almost 40 percent of its entire amount, which illustrates enormous purchasing power in second-tier cities in Chinese market. In addition, Wal-Mart initiated the expansion to less prosperous regions in Nanchang in 2003 and operated the 100th superstore worldwide in central province of Henan in 2006. Hence, it seems that this strategy displays a satisfying growth opportunity for the foreign retailers in Chinese market.
Hypermarket format
Different from typical domestic operating channel, notably as supermarkets, Carrefour, like
A recent article (Liu Jie, 2008) revealed that restrictions on business numbers, geographical positions and stockholders have been gradually diminished, which can be regarded as a supplement to promises to WTO. As a consequence of market liberalization, foreign retailers have gained rights to compete with domestic companies in Chinese market. Over recent years, Chinese market has appealed the booming entry to external retail chains and has become a fierce competition region for both foreign and internal companies, including Carrefour and Wal-Mart. Carrefour and Wal-Mart are well known worldwide largest retail giants recognized as France and America based companies respectively and are battling for the reputation of being the largest foreign retailer in Chinese market with increasing amount of outlets and sales( Moreau and Raphael ,2008). The purpose of this essay is to compare and contrast tactics of Carrefour and Wal-Mart in Chinese market.
Expansion to Second -tier cities
Having faced saturation of marketplaces in first –tier cities, such as richer coastal districts, both Carrefour and Wal-Mart adopted the strategy in 2007 of expanding their hypermarkets into interior regions in China where market development potential and urbanization trend are highly evaluated(Liu Jie, 2008). For instance, stores of Carrefour in second-tier regions account for almost 40 percent of its entire amount, which illustrates enormous purchasing power in second-tier cities in Chinese market. In addition, Wal-Mart initiated the expansion to less prosperous regions in Nanchang in 2003 and operated the 100th superstore worldwide in central province of Henan in 2006. Hence, it seems that this strategy displays a satisfying growth opportunity for the foreign retailers in Chinese market.
Hypermarket format
Different from typical domestic operating channel, notably as supermarkets, Carrefour, like
References: http://www.filination.com/blog/2009/03/14/china-business-strategy-walmart-chinese-culture/ (Accessed 20.October 2011) Liu Jie (2008) Smart mart [Online] Beijing: China daily Available from: http://www.chinadaily.com.cn/bw/2008-07/21/content_6862213.htm (Accessed 20.October2011) Moreau and Raphael (2008) Carrefour and Wal-Mart 's differing expansion strategies in China Available from: http://www.thefreelibrary.com/_/print/PrintArticle.aspx?id=213856460 (Accessed 20.October2011) Xinhua(2005) Wal-Mart, Carrefour eye medicine retail business. http://www.chinainvest.com.cn/E/invest/weekly/W20050530-01.html (Accessed 20.October2011) Wal-mart and Carrefour in China: Whose strategy is better.[Online] Available from: http://www.supplychainer.com/50226711/walmart_and_carrefour_in_china_whose_strategy_is_better.php (Accessed 20.October 2011)