Carrefour', which means Crossroads' in French, is an international hypermarket chain headquartered in Levallois-Perret. A year after its conception in 1959, its first supermarket was opened in Annecy in Haute-Savoie. Today, in the large distribution sector, the Carrefour group is the leading player in Europe and is ranked second worldwide after Wal Mart. It is present in 30 countries and accounts for 12,028 stores (including franchises).
According to the annual report of 2005, the group posts a turnover of approximately 74.49 billion HT, which corresponds to 93.61 billion euros which is inclusive of all taxes. Carrefour distributes its turnover geographically as follows: 48% in France, 38% to the rest of Europe, 7% in America and 8% in Asia. In China, Carrefour was the first foreign retail chain to set up shop in the domestic sector.
General overview of the presence of Carrefour in Asia
- Areas of implantation,
- Comparison with European competitors
- Explanation of the situation.
- Assessment of the number of French expatriates in Asia and their functions.
The first Asian country where Carrefour set up its activities is Taiwan, where it opened its first hypermarket in 1989.
Today, Carrefour is present in eight Asian countries and has been increasingly strengthening its position. Whether through franchise agreements, acquisitions or openings, the group has revitalized its trade policy in most Asian countries.
- In China, Carrefour celebrated its ten-year presence last year with 35,000 employees working in 70 hypermarkets, eight supermarkets and 225 hard discount stores. We note that China has transferred its focus from supermarkets to hypermarkets and hard discount stores. In China, Carrefour is called jialefu', i.e., maximum happiness.
- In Taiwan, Carrefour has 37 hypermarkets and 10,000 employees. This is the second biggest operational hub of Carrefour in Asia after China.
- South Korea: Carrefour has been present for nine years in this country. It owns 31 hypermarkets and is the fourth leading distributor. The new CEO who aims to focus only on markets where it can be a leader has sold its hypermarkets in Korea.
- Indonesia, where the company has been operational for 7 years now, owns 20 hypermarkets with 5 new openings in 2005. Carrefour is the second largest retailer and a leader in the hypermarket format.
- Japan: the Group's business (8 supermarkets) was sold to Aeon in March 2005. The latter operates under the Carrefour franchise and distributes branded products in the country.
- Thailand, the group is the third biggest distributor in the hypermarket format; Carrefour Quality contracts were signed with five suppliers for the cultivation of vegetables, fruit and rice.
- Malaysia: Carrefour has been established there since 1996 and now has eight hypermarkets.
- Singapore: Carrefour has been operational there since 1997 and now has two hypermarkets.
The main European rival for Carrefour in Asia is Auchan. This French group opened its first store in Roubaix in 1961, and has been growing steadily, becoming a major retail group worldwide.
[...] Part Two: Comparison of strategies Let us compare the strategies adopted by Carrefour in Thailand, Taiwan, China and Mexico with a table. In general, the group's strategy is to strengthen its market share in each country it operates in by developing the brand's ace card, and playing on the complementarity of its formats. China Thailand Taiwan Mexico Partnership with a Taiwanese group involved in the distribution, finance and real estate. Carrefour takes Carrefour takes Carrefour takes suppliers and suppliers and suppliers and local products local products local products references are Taiwanese are Asian). [...]
[...] "International companies that recruit must adapt their remuneration policy to their strategic objectives and find the balance, knowing that competition is no longer between multinationals but Chinese companies, sector by sector, region by regional." Workforce: Over the past ten years, the salaries of employees of multinational companies have been increasing significantly. This has led some foreign companies, in a bid to reduce costs, to begin relocation to the interior. There, they pay less for their employees, regardless of their level, but face regulatory barriers (including hukou) and difficulties in finding candidates for management positions. [...]
[...] The products have a very special packaging based on the nature of the product for reasons of hygiene and food safety. This group does not have the same notoriety as Carrefour, and Metro Asia has far fewer stores than Carrefour. But Metro is a dynamic group, which has seen its turnover increase by about 4%. Other competitors of Carrefour in China are not any of European countries: PriceSmart (United States), Parkson (Japan) and Wal-Mart (United States). The latter has a turnover five times larger than that of Carrefour. [...]
[...] Ø Sociological barriers: Labor: The social objectives of development of China are compatible with the existence of a rural labor force numbering 150 million Chinese without qualification and without social protection? Can China, which today enjoys a relatively low labor force, will increase wages and benefits for the entire population, without losing its competitiveness against other emerging countries (especially Asian)? In terms of barriers for French companies, will their profit margins be as lucrative if you increase the wages of labor in China? [...]
[...] - In Thailand, the group is ranked 3rd with respect to hypermarkets and Carrefour quality contracts were signed with five suppliers for the cultivation of vegetables, fruits and rice. - Malaysia: Carrefour has been established since 1996 and there are now eight hypermarkets. - In Singapore: Carrefour has been present in Singapore since 1997 and it now has two hypermarkets. European Competition in China: Auchan The main European competitor of Carrefour is Auchan in Asia. The French group opened its first store in Roubaix in 1961 and has grown steadily ever since, having major retail groups worldwide. [...]
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