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Why does Carrefour leave China? Is Carrefour out of business?

Carrefour eventually sold out to Tencent and quit the Chinese market. Carrefour turns to e-commerce, so why does Carrefour withdraw from the Chinese market?

Recently, Carrefour officially announced that 2000 employees have been cut from its French headquarters, and it has signed terms of potential investment intention with Tencent and Yonghui. After that, Carrefour will turn its center to e-commerce.

Although the statement is euphemistic, it actually shows that Carrefour eventually sold itself to Tencent and withdrew from the Chinese market.

Why does Carrefour withdraw from China?

In 1995, Carrefour began to enter the Chinese market. In just a few years, Carrefour has opened stores in Shanghai, Beijing, Jiangsu, Guangdong, Sichuan, Yunnan and other places. In 2006, Carrefour has more than 100 stores in China, and every one of them is quite popular.

In 2009, Carrefour China's leading position in China's hypermarket was surpassed by RT Mart. Soon, the number of Carrefour stores in China was surpassed by Wal Mart, the biggest competitor for half a century. Every year since then, Carrefour's performance and profits in China have been retrogressive, falling by more than 10% every year, never improving.

In 2017, Carrefour's turnover in China was 48 billion yuan, with a net profit of only 32 million yuan. According to the turnover, Carrefour ranked seventh, behind traditional competitors such as China Resources Vanguard, RT mart, Wal Mart, and new competitors such as Yonghui supermarket.

Why does Carrefour lose in China?

Carrefour's continuous decline in China's performance is mainly due to the impact of e-commerce. Since 2010, the rapid development of e-commerce in China has greatly hit the traditional supermarket industry. Carrefour also tried to fight back.

In 2013, Carrefour China established an e-commerce 'Carrefour online mall', focusing on home delivery. However, Carrefour's delivery is too slow. It can be delivered the next day in Beijing as soon as possible, and a few areas in Shanghai can enjoy 3-hour rapid delivery service. Moreover, users need to buy 129 yuan to enjoy the package. Compared with tmall's 88 yuan package supermarket and Jingdong's 99 yuan package supermarket, the time and price have been lost.

Later, with the development of China's economy, time-saving, high-quality and service-oriented convenience stores have sprung up, dividing up the market of some large supermarkets. In 2015, Carrefour first launched "easy Carrefour" convenience stores in Shanghai, seizing the business of community convenience stores with its own land price advantage. However, there are only 30 stores in Carrefour easy since it opened its first store. Since 2017, all newly opened stores have reduced their own stores and expanded the proportion of experience businesses to retain customers. The plan, which was implemented for a year last year, still failed to stop Carrefour's decline in China.

In the supply chain, Carrefour also did not do enough. It did not establish its own distribution center and logistics link, and did not have its own supply system. The main reason was that the supplier delivered the goods directly to the store.

At the same time, Carrefour also faces such problems as employees' slack, high product price, rigid relationship with suppliers, insufficient supply and food safety. As a result, Carrefour's performance in China has been declining year after year and it has to withdraw from China.

In fact, in recent years, Carrefour has frequently failed in overseas markets. It has exited from Japan, Russia, Malaysia, Singapore and other markets successively. It has to shrink its strategy and put its business center in Europe, mainly in the local market of France.

In 2018, Carrefour ranked 68th among the top 500 companies in the world, with a turnover of US $91.276.3 billion and a net profit of US $598.6 million. Carrefour's business in Asia is not as good as it is in the world:

According to the financial statement data released on Carrefour's official website, the annual sales of Carrefour in Asia from 2012 to 2017 were 7.218 billion euros, 7.272 billion euros, 7.056 billion euros, 7.459 billion euros, 6.881 billion euros and 6.557 billion euros, respectively. Over the past five years, Carrefour's sales in Asia have declined by 661 million euros, or 5.207 billion yuan.

Tencent layout retail sector

Start ecological game with ALI

Together with Yonghui to invest in Carrefour China, Tencent is facing a situation in which the main bodies of the retail sector 'fight each other from left to right'. At present, Tencent department's retail war is raging. Liu Xingliang, President of DCCI Internet Research Institute, analyzed that Tencent's retail ecology also has objective commercial interests. Focusing on the retail sector is an excellent outlet for Tencent to realize social traffic.

According to the analysis of industry executives, Alibaba and Tencent seem to compete in the marketing, e-commerce and social sectors, but in fact, they are behind the ecological game. 'the more scenes that run through, the more complete the ecology, and the more possibilities for the future. The essence of competition is to seek accurate big data. '

It is worth mentioning that Tencent is stepping up in the retail sector, and Alibaba is starting to fight back in the social sector. Its investment in Momo, holding Weibo, pushing contacts and nailing are all cases.

Liu Xingliang said frankly that the two families are still in a state of anxiety. 'Alibaba's business (traffic) map and Tencent's life (traffic) map have their own advantages and disadvantages. No one is completely ahead. '