Industry analysts pointed out that since economic crisis swept the globe in 2008, foreign retail giants have been in face with the economic slowdown, the demographic dividend decline, spending power decline and factor costs increase, thus their profit margins continue to be squeezed.
Shop close, layoffs, hypermarkets difficult to survive
Bai Ming, deputy Director of the International Market Research Institute of Department of Commerce, said to International Business Daily in an interview, Wal-Mart, Carrefour and other transnational retail giants entered the Chinese market earlier, with the improvement of national living standards, their marketing model and products were with competitiveness, thus they leaded to high profit growth in a long term." But prosperity of any period is not sustainable but temporary. With the continuous development of China's domestic brand market, these giants’ advantage diminished."
Indeed, there are certain objective factors that multinational retail giants frequently closed shop. In recent years, supermarkets are in the chilly winter. In Chinese market, for example, in 2013 the growth rate of the chain stores was only 7.6 percent, which was the lowest in 15 years. The date of this year is expected to hover around 5 percent.
E-commerce, the last straw of self-redemption?
Against this background, many retail companies have chosen to enter e-commerce business as a method of self-redemption. Wal-Mart's store on the yihaodian in 2013 achieved over ten billion yuan in annual sales, Gome, Suning Tesco also entered e-commerce business, while Carrefour chose to enter the market of convenience stores.
Experts predict that supermarkets "downsizing" may be a trend in the future. The convenience of e-commerce makes it not necessary for consumers to go to the supermarket to do a one-time purchase, which makes the convenience store (with community-based, high flexibility and personalized service) become the important formats with potential growth in the future.
Whether the strategic adjustment or the layout of e-commerce business, deputy director of the US Department of Commerce Institute suggested most foreign companies to take localization operation and globalization standards, to focus on market characteristics and needs, to adjust marketing strategies, to improve product quality, to improve after-sale service and to avoid acclimatized. also, they should pay attention to the use and management of human resources and make the local social and economic benefit from the development of the enterprise as much as possible. " (www.chinainout.com)
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