French Carrefour Group has more than 5,200 branches in 26 countries and regions around the world, with annual global sales of $36.3 billion, profits of $760 million and more than 240,000 employees.
Carrefour's large supermarket chains in Taiwan Province Province, Shenzhen, Beijing and Shanghai are doing well. Why does it single out Hong Kong?
Carrefour said that the reason for the closure was the fierce competition in the Hong Kong market, and it was difficult to find a suitable place to open a large supermarket in Hong Kong, and it was difficult to gain enough market share in the short term.
Carrefour's bankruptcy liability can be analyzed from two aspects:
1. On its own
First, Carrefour's "one-stop shopping" (allowing customers to buy everything they need at one time) is not suitable for the narrow and densely populated shopping environment in Hong Kong.
Carrefour's shopping concept is based on spacious places, which runs counter to the social environment in Hong Kong. Obviously, resources are not used properly.
This reflects Carrefour's shortcomings in adapting to Hong Kong's social environment.
Second, Carrefour has no property in Hong Kong, but it needs tens of thousands to 65438+ ten thousand square feet (1 foot: o 305 meters) to operate, and it is burdened with huge rents. At the same time, it is restricted by the lease. When it becomes a momentum, the lease will be full and competitors will take it away at a higher rent. Carrefour's original advantage was all-inclusive, but its competitors quickly imitated it, and this advantage was gradually lost.
In addition to the four branches that have already opened, Carrefour has rented more than 300,000 square feet of floor space in the new city center of Tseung Kwan O and the new port city center of Maanshan, but it has never been opened, which has also brought it a heavy economic burden.
Thirdly, Carrefour has 20 branches in Taiwan Province Province, which can form a distribution scale, but there are only four branches in Hongkong, which directly leads to relatively high distribution costs.
During its March into Hong Kong, it also had some disputes with suppliers and almost resorted to law.
2. Look from the outside.
First, when 1996 entered Hong Kong, it happened to be the most expensive period in the history of Hong Kong, and its operating cost was high, which was a heavy pressure for Carrefour to win at a low price. Unfortunately, during this period, it was hit by the Asian financial turmoil, and Hong Kong's economy was also hit hard. Carrefour has been unprofitable due to deflation in recent years.
Secondly, the price reduction wars initiated by local supermarket groups in Hong Kong such as Baijia, Wellcome, China Resources and Apple Fast Retailing have dealt a heavy blow to Carrefour's operation.
As an internationally renowned supermarket group, Carrefour took the initiative to participate in this two-year price reduction war. However, the competitive price reduction of several local supermarket groups finally made Carrefour unbearable and failed halfway into Hong Kong.
Thinking about the problem:
1. What do you think is the real reason for Carrefour's defeat in Hong Kong?
2. Do you think local retailers in China can compete with the world retail giants after entering China?
3. What does the failure of Carrefour inspire the development of retail industry in Chinese mainland?
4. After China's entry into WTO, how does Chinese mainland's retail industry formulate its competitive strategy with the world's retail giants?
Answer prompt
Supermarkets in Hong Kong used to be a confrontation between British-funded consortia and Chinese-funded consortia.
Carrefour's business philosophy was quickly adopted by Baijia and Wellcome, the supermarket chains of two local consortia.
In recent years, Parknshop and Wellcome have been opening supermarkets in large private housing estates and shopping malls, integrating the concepts of traditional markets and supermarkets to attract customers, which are very popular with customers.
It is understood that Carrefour's market share in Hong Kong is still less than 10% in the past four years, and it has been supported by losses for more than three years.
Carrefour's "Dragon Crossing the River" lost to Baijia and Wellcome, because the latter two accounted for more than 80% of the supermarket market share in Hong Kong.
In the past four years, where there is Carrefour, there must be Chinese-funded or British-funded supermarkets nearby. Local supermarket groups try their best to expand their market share by cutting their throats and grabbing customers at ultra-low prices. Carrefour is unprofitable and will inevitably go bankrupt.
According to the research report of McKinsey, a world-famous enterprise management consulting company, after China's entry into WTO, the biggest impact will occur in the commercial field.
In China, chain retail commercial enterprises started late, and there is still a big gap with the international level.
Wal-Mart, Carrefour, Metro, Wankelong, sogou and other powerful foreign-funded commercial enterprises have successively entered China and made considerable progress.
Their business philosophy and competitive model have greatly shocked domestic enterprises, but this is not enough to predict that the prospects of domestic commercial enterprises must be bleak. The key lies in how we do it ourselves.
Carrefour's defeat in Hong Kong shows that the Big Mac is not invincible. Only by understanding and adapting to the market can we do a good job in the market.