At present, there are many types of retail business. There are traditional commercial and supermarket formats represented by Carrefour and Wal-Mart, traditional e-commerce formats represented by Taobao and Tmall, and new retail formats represented by Hema Xiansheng and Super Species. At first, the traditional commercial super format almost dominated the entire retail market. Later, due to the impact of the traditional e-commerce and new retail formats, the traditional commercial and supermarket formats are no longer fashionable.

As the first traditional supermarket to introduce the concept of “hypermarket” to China, Carrefour used to monopolize the Chinese retail market for a long time. However, carrefour China has been losing ground in the retail market in recent years. Nowadays, carrefour China has no former glory.

So what happened to Carrefour China? What caused Carrefour China’s fall from the top? What layout adjustment did Carrefour China make after falling? What enlightenment can the development and change of Carrefour China bring to the retail industry? To answer these questions, we should start from the development of Carrefour China.

The glorious history and recessionary status of Carrefour China under the change of retail format

Founded in 1959 in Boulogne, France, Carrefour is a French retailer. In 1963, Carrefour initiated a new retail format — Hypermarket, which swept the world. Carrefour used to be an international retailer with more than 9200 stores in 31 countries and regions. In addition, Carrefour has been the largest retailer in Europe and the world’s second largest international retail chain group. Carrefour opened its first Store in Asia in Taiwan in 1989. From the end of the 20th century to the beginning of the 21st century, Carrefour began to sweep the Chinese mainland on a large scale.

When carrefour first arrived in China, it was a juggernaut. Since its entry into the Chinese mainland in 1995, Carrefour has applied the international advanced supermarket management model, committed to providing inexpensive goods and quality service, so it is favored by the majority of consumers. It is understood that in just a few years after entering China, Carrefour stores almost spread all over China, from Harbin in the north, Haikou in the south, Urumqi in the west and Shanghai in the east.

Back then, no matter how great the country’s retail suppliers were, they were proud to have Carrefour on their shelves. After all, as a new form of business, “hypermarkets” had a near-monopoly on retail traffic in their own right. In other words, carrefour can be put on the shelves is the double protection of flow and profit. As a result, Carrefour China became a global cash cow and a model for the Chinese retail industry at that time.

At the beginning of the 21st century, taobao, Tmall and other e-commerce began to impact the entire retail market. Carrefour China’s role model faded and it lost the battle in history. However, Carrefour’s market share in China has been falling since 2012. According to kantar Consumer Index, sun Art took 8.20% of the national retail market share as of September 8, 2017, ranking first. China Resources Vanguard ranked second with 6.40%; Wal-mart ranked third with 5.10%. Carrefour China has only 3.30% of the domestic retail market, ranking fourth. In just a few years, Carrefour’s domestic market share fell from the first to the fourth, and the market share gap with the first as much as 4.90%.

In fact, Carrefour China is not just losing market share. In terms of market sales and number of stores, Carrefour China is also gradually being overtaken. As early as 2009, Carrefour China was overtaken by RT-Mart in mainland market sales. In 2016, RT-Mart surpassed Carrefour China, which had a sales volume of 158 million yuan, with 264 million yuan per store. Carrefour’s China same-store revenue declined from 2012 to 2017, according to the company’s financial results. In addition, Carrefour’s financial results also show that from 2010 to 2016, Carrefour China suffered from a wave of store closures to varying degrees. It is understood that in 2010, the number of carrefour Stores in China has been exceeded by Wal-Mart. To be sure, Carrefour China is losing out in terms of store numbers.

The decline of the retail market makes Carrefour China no longer a proud child of The Chinese retail industry.

Why did Carrefour China fall from its peak

Carrefour China’s fall from the top in the past few years has been pitiful. In the end, the reason why Carrefour China is no longer the big boss of the retail industry in the past is because of the double attack of internal troubles and external threats.

Four major domestic concerns:

First, in terms of business management, the French headquarters seriously interfered in the management of Carrefour China, which destroyed the original management ecology.

At the beginning, carrefour China heyday, carrefour headquarters for the Chinese region to import large supermarket management skills and advanced experience. It also gives regional leaders in China a great deal of autonomy. Except for some imported goods, most of the goods are purchased locally by the regional head. Such autonomy allowed Carrefour China to expand rapidly in its early years. Later, Carrefour France headquarters began a large area of involvement in carrefour China management. Carrefour China has lost the right of independent management in many regions. However, after the French headquarters took over the senior executives of Carrefour’s various regions in China, they were not acclimated to the different conditions in management, which led to the fault in all aspects of business. Carrefour’s China division is losing its local flavor and is reeling from chaotic management.

Second, in terms of supply chain, Carrefour has not formed a mature supply chain after entering China for so many years.

As far as foreign supply chain is concerned, Carrefour China once prospered by relying on carrefour’s international supply chain in the early years, but now this advantage is gradually weakened. In the past, when imported goods were relatively scarce, Carrefour China introduced a variety of imported goods to China by virtue of a relatively perfect supply chain abroad, which was loved by many middle class consumers. Now, imported goods can be bought in almost every major supermarket, carrefour China has lost the advantage of imported products supply chain.

In terms of domestic supply chain, Carrefour China has not had a special distribution center or a complete supply chain. Most domestically sourced goods are delivered directly to store warehouses by suppliers, or even put on shelves by suppliers themselves. In the short term, such a supply model helped Carrefour China grow rapidly, but it also undermined its drive to integrate its domestic supply chain. As a result, carrefour China is often at the mercy of others in terms of supply because its supply chain is not optimized. The earlier boycott of Carrefour China by the paper and roasting industries is a prime example.

Thirdly, in terms of product quality, Carrefour China has been exposed for many times for the existence of negative news about fish eye beads.

2012 was a year of negative news about the quality of Carrefour’s Products in China. In this year, Carrefour was exposed that the same three yellow chicken was divided into white chicken and chicken, the price difference was as high as double. More expired food will be re-broken and re-packaging, change the date after the sale. Toxic oily fish are also sold as nutrient-rich cod. This series of violations have been investigated and dealt with by the relevant departments. During this period, the product quality of Carrefour China was also questioned, and its corporate image was greatly damaged, which indirectly affected its store sales.

Fourth, in terms of land rent for its stores, Carrefour has been renting space. After the lease expires, it is in a dilemma before relocating and doubling the rent.

Nowadays, land is expensive, especially if it can be located in a large supermarket, its rent is absolutely not cheap. This was true before Carrefour came to China, and even more so 20 years later. Carrefour acquired the right to use the site through leasing, and the rent will inevitably rise after the lease expires, so will the operating costs. A sharp rise in costs would then add to carrefour’s difficulties in China. However, if the contract is not renewed, relocation will be required. If carrefour chooses to relocate, it is likely to lose customer traffic it has accumulated over the years. This puts Carrefour in a dilemma.

Three major external hazards:

First, in the early 21st century, the impact of traditional e-commerce. In the past, when online traffic was at its peak, the real retail economy continued to slump, and the retail of hypermarkets faced severe recession. The vast majority of traffic flows into the online, causing different degrees of impact on the traditional supermarkets. At that time, Wal-mart, Yonghui, Lotte Mart and other super stores were affected to varying degrees, and Carrefour was no exception.

Second, carrefour’s dominance in China has been undermined by the rise of other traditional retailers. Earlier, Carrefour was the country’s sole leader. Later, local retailers such as RT-Mart and Yonghui rose one after another, and foreign retailers such as Wal-mart and Lotte Mart stepped in. The rise and intervention of these retail enterprises have taken a large part of the retail market share. Under the impact of these retail enterprises, Carrefour China is gradually losing its position as the no. 1.

Third, after entering the new retail transformation stage, the new retail formats represented by “Hema Fresh” and “super species” once again impact the retail market. Carrefour, which used to focus on fresh food, has been hit again, and its prospects are uncertain.

It is for both internal and external reasons that Carrefour China is slowly moving away from the center of the retail arena.

Seeing the wind gone, Carrefour China to diversified retail business transformation

Seeing its glamour fade, Carrefour China seems to have woken up. With the current wild new retail wind, Carrefour China began to define its future development direction, and quickly adjust its development.

On the one hand, Carrefour China accepted Tencent, Yonghui shares, began to layout e-commerce. Carrefour China signed cooperation agreements with Tencent and Yonghui, aiming to build distribution centers and centralized procurement rights on the basis of its own global retail experience, with the help of Tencent’s excellent technology and Yonghui’s advanced operational experience, and ultimately promote the digital transformation of its retail business. Tencent’s stake in carrefour also marks that, in addition to vanguard, all the TOP5 retail enterprises in China are taking sides with Internet giants.

Shortly after the partnership with Tencent and Yonghui, Carrefour China opened its first “Le Marche” smart lifestyle retail store in Shanghai, a flagship wechat pay smart retail store that focuses on catering, fresh and imported goods. The opening of Le Marche marks the start of Carrefour’s digital transformation. It is reported that Carrefour will increase its digital investment to 280,000 euros over the next five years, a six-fold increase.

On the other hand, In January this year, Carrefour released a “transformation plan for 2022”, which aims to broaden sales channels and diversify its business. In fact, in terms of development purposes, Carrefour’s 2022 plan and Tencent have a certain overlap. If there must be an affiliation, siding with Tencent can be seen as a subset of the 2022 plan.

But the 2022 plan lays the groundwork for a new business model in all its aspects. Specifically, it simplified and opened the organizational structure to improve operational efficiency, closed 273 stores of Its Subsidiary Diatian Supermarket to reduce costs, and concentrated capital to improve commodity competitiveness. At the same time, Carrefour China also adjusted the service structure, strengthen the fresh product category, the target of 2022 fresh product consumers to increase one million.

All in all, Carrefour China has made a big adjustment in the new retail market. According to Carrefour China’s vision, in the future, Carrefour China will no longer be a retail enterprise with hypermarkets as its main business format, but a retail business collection integrating e-commerce, smart life retail and traditional hypermarkets and other diversified business formats.

The enlightenment brought by Carrefour China to The Chinese retail industry: the retail market changes with each passing day, and the supply chain and the new ecology are the magic weapon to win

The development of Carrefour China reflects the rapid changes in the retail market. No company, it seems, can remain dominant forever in such a fickle retail market. To this, Carrefour China also gave the retail industry such inspiration.

Enlightenment 1, it is very important to optimize and integrate the supply chain, and a perfect supply chain is the basis for retail enterprises to operate. In the past, the lack of a complete domestic supply chain was a major pain point for Carrefour China, and one of the major reasons for carrefour China to lose its leading position in retail. For example, a retail business is like an organic organism, while the supply chain is the network of blood vessels in the organism. Only a healthy network of blood vessels can ensure the flow of blood and the organism can survive.

Enlightenment two, correctly grasp the new retail format, can take the lead in the new market. For example, 20 years ago, hypermarkets were a new form of retail business, and Carrefour China once dominated the retail industry because it correctly grasped this new form of business. Nowadays, all kinds of new business forms in the retail industry are booming, and the one who correctly controls the new business forms can take the lead in the new retail market.

No matter how the retail market changes, the supply chain and new ecology still play a very important role. At any time, constantly optimize and integrate the supply chain, correctly grasp the new retail business is a magic weapon to win.

Carrefour China’s past has been the industry after dinner talk. After a fall, Carrefour China is reclaiming its position as the biggest retailer. However, with the rise of new retail formats and the expansion of other retail enterprises, it is not easy for Carrefour China to become the no.1 retailer again. However, carrefour China is sure to face a tough battle ahead.

Article/Liu Kuang public number, ID: Liukuang110, this article first kuang Venture capital network