Carrefour China opts for convenience

1 December 2014

SHANGHAI: As department stores and hypermarkets record slower growth in China, Carrefour, the French retail giant, is diversifying its portfolio by opening its first ever convenience store in the country.

The world's second-largest retailer by revenues, which announced earlier this year that it planned to exit the Indian market, last week opened an "Easy Carrefour" branded store in the Minhang district of Shanghai, Yibada reported.

As well as seeking to capitalise on lower maintenance and operating costs, Carrefour is aware that the Chinese convenience store sector has been recording double-digit growth.

The China Urban Convenience Store Index, a study of 26 cities by the China Chain Store & Franchise Association, found the sector grew an average 19.5% in 2013, making it the fastest growing sector in Chinese retailing.

Furthermore, the index showed that the average saturation level for convenience stores in mainland China is one for every 5,000 residents, compared with one for every 2,000 in Japan and Taiwan.

However, despite the opportunities presented by the sector, the Easy Carrefour brand is likely to face stiff competition from established players in Shanghai, IGD Retail Analysis warned.

Convenience retailers Family Mart, for example, has 300 stores in the city while local chains Alldays, Kedi and Quik all have a strong presence.

Carrefour is not the only major international hypermarket chain seeking to rebalance its offering for Chinese consumers. Walmart, too, has launched a restructuring, the Financial Times reported.

The US retailer, the largest in the world, has confirmed that it is cutting 30 mid-level management jobs and that it is streamlining its business to reduce "complexity".

It is also reorganising its supplier network in order to increase the efficiency of its distribution and to tighten quality control, a matter of great importance for Chinese consumers.

Data sourced from Yibada, International Business Times, IGD Retail Analysis, Financial Times; additional content by Warc staff