Retailing in China
Localization Strategy of Transnational Retailers in China
Abstract & Key Words Abstract: As one of the world’s largest consumer markets, China is of strategic importance to transnational giant retailers. Yet, unique Chinese cultural, business, and political environments have posed great challenges to transnational retailers operating in the Chinese market. Based on the fact that the localization strategy is critical for the success of retailing operations in China, it is necessary to diagnose localization blunders of transnational retailers. Therefore， the aim of the present study is to work out a high-level plan of successful localization strategies. By analyzing the status quo of Chinese retail market and the current situation of transnational retailers in China (including the case study of Carrefour), this paper explores how consumer behavior, culture and government roles can affect the localization strategy and creates a list of formats for successful localization strategies. The paper proceeds in four sections. First, the concept of retailing localization (3 layers of localization) is introduced as an antidote to the deficiencies of the prevailing study approaches to transnational retailing. One background sections then follow. While the first part charts the status quo of Chinese retailing market and the rapid growth of transnational retailing, the second profiles the opportunities and threats transnational retailers face in the process of localization. Then, by studying the case of Carrefour (China), the strategy analysis of localization in China for transnational retailers is profiled, including the analysis of the 3 layers of localization – namely localizing the strengths, localizing the products and operational system (4Ps) and localizing management and corporate cultural (PEP). Finally, the wider implications of this study for transnational retailers in the process of localization are put forward in the concluding section.
1. Introduction 1.1 The
Abstract & Key Words Abstract: As one of the world’s largest consumer markets, China is of strategic importance to transnational giant retailers. Yet, unique Chinese cultural, business, and political environments have posed great challenges to transnational retailers operating in the Chinese market. Based on the fact that the localization strategy is critical for the success of retailing operations in China, it is necessary to diagnose localization blunders of transnational retailers. Therefore， the aim of the present study is to work out a high-level plan of successful localization strategies. By analyzing the status quo of Chinese retail market and the current situation of transnational retailers in China (including the case study of Carrefour), this paper explores how consumer behavior, culture and government roles can affect the localization strategy and creates a list of formats for successful localization strategies. The paper proceeds in four sections. First, the concept of retailing localization (3 layers of localization) is introduced as an antidote to the deficiencies of the prevailing study approaches to transnational retailing. One background sections then follow. While the first part charts the status quo of Chinese retailing market and the rapid growth of transnational retailing, the second profiles the opportunities and threats transnational retailers face in the process of localization. Then, by studying the case of Carrefour (China), the strategy analysis of localization in China for transnational retailers is profiled, including the analysis of the 3 layers of localization – namely localizing the strengths, localizing the products and operational system (4Ps) and localizing management and corporate cultural (PEP). Finally, the wider implications of this study for transnational retailers in the process of localization are put forward in the concluding section.
1. Introduction 1.1 The