V S CARREFOUR VS WAL-MART IN CHINA TWO DIFFERENT MODELS NAZIR MOULAN & MAXIME WASSELIN CASE

Transcription

1 V S CASE CARREFOUR VS WAL-MART IN CHINA TWO DIFFERENT MODELS DATE GROUP NAZIR MOULAN & MAXIME WASSELIN 1

2 Summary I. COMPANIES PRESENTATION II. COMPETITIVE PRESENTATION 1. CUSTOMERS 2. SUPPLIERS 3. COMPETITORS 4. KEY SUCCESS FACTORS 5. COMPETITIVE ADVANTAGE III. IMPLEMENTATION & EXPANSION IN CHINA 1. HOW DID THEY IMPLEMENT THE BRAND? 2. HOW DO THEY SPREAD OUT? 3. HOW WILL THEY GROW IN THE FUTURE? 2

3 Companies presentation FOUNDED NATIONALITY FRENCH AMERICAN EMPLOYEES (2009) TURNOVER 107 BN 300 BN IN CHINA SINCE # OF HYPER MARKET SHARES 2,3% (#7 - $5,4BN) 3,2% (#5 - $7,5BN) EMPLOYEES EXP. STRATEGY ORGANIC M&A 3

4 CUSTOMERS MIDDLE-CLASS & UPPER-CLASS LOOKING FOR AN «EXPERIENCE» URBAN AREAS AVERAGE BUYING BEHAVIOUR: 120RMB. ==> NEED TO FULFILL CONSUMERS NEEDS. ==> CARREFOUR ADAPTED ITSELF TO THE CHINESE MARKET FIRST 4

5 SUPPLIERS They purchase most of their goods within China charge suppliers relationship - no fees flexibility electronic data system to manage stocks 5

6 COMPETITORS TOP10 RETAIL COMPANIES < 30%. WAL-MART 3,2% ; CARREFOUR 2,3% TOP3 HYPERMARKET/SUPERMARKET IN RETAIL SALES (2009) 1. RT-MART (AUCHAN) 2. WAL-MART 3. CARREFOUR LOCALIZATION CARREFOUR : 5,2% SHARE IN LEVEL A CITIES, 1% IN LEVEL B AND 0,1% LEVEL C. WAL-MART : 2% SHARE IN LEVEL A CITIES, 4,4% IN LEVEL B AND 3% LEVEL C. SOURCE: EUROMONITOR INTERNATIONAL AND RETAIL ASIA 6

7 COMPETITORS TOP10 RETAIL COMPANIES < 30%. WAL-MART 3,2% ; CARREFOUR 2,3% China s retail market in ,32 % 3,82 % 3,65 % 3,43 % 3,21 % 71,93 % 3,15 % 2,30 % 1,66 % 1,32 % 1,21 % SOURCE: EUROMONITOR INTERNATIONAL AND RETAIL ASIA GMELY ($10,0bn, 4,32%) China RE ($8,93bn, 3,82%) Suning Appliance ($8,53bn, 3,65% Brilliance group ($8,0bn, 3,43%) Wal-Mart ($7,5bn, 3,21%) Auchan ($7,36bn, 3,15%) Carrefour ($5,38bn, 2,3%) Bright Food ($3,89bn, 1,66%) Dashang ($3,07bn, 1,32%) Belle ($2,83bn, 1,21%) Others ($168bn, 71,93%) 7

8 KEY SUCCESS FACTORS CHINESE PURCHASING BEHAVIOR LOCALISATION CHINESE GOVERNMENT ADAPTATION GOOD MANAGEMENT SYSTEM WITH SUPPLIERS 8

9 9

10 HOW DID THEY IMPLEMENT THE BRAND: WHY CHINA? 1992: GOVERNMENT ALLOWED JV WITH FOREIGNERS HUGE POTENTIAL MARKET POPULATION ON COMING OF THE MIDDLE- CLASS RETAILING MARKET NOT YET ORGANIZED QUITE NO COMPETITORS Urban middle class (million) Lower middle class Upper middle class

11 HOW DID IMPLEMENT THE BRAND? 1995: JOINT VENTURE WITH SHENZHEN INTERNATIONAL TRUST & INVESTMENT CO. 1996: FIRST SUPER CENTER IN SHENZHEN KEPT THEIR MODEL «EVERYDAY LOW PRICE» AND THE BRAND NAME WAL-MART BUT HAD TO ADAPT THE ENVIRONMENT 11

12 HOW DID IMPLEMENT THE BRAND? JV IN 1995 WITH ZHONGCHUANG COMING IN CHINA WITH A LOT OF EXPERIENCE IN ASIA (TAIWAN SINCE 1989) OBJECTIVE: BIG CITIES & LOW PRICES NEW BRAND NAME: «JIA LE FU» MEANS «HAPPY FAMILY» 12

13 HOW DO STORE FORMATS: WALMART S FUMBLING SPREAD OUT? STORE LOCATIONS: FROM SMALLER CITIES TO LARGER CITIES EXPANSION : UNTIL 2004: SLOW : OPENING OF 20 STORES 2007: BOUGHT 35% OF TRUST-MART ==> M&A GROWTH (AND ORGANIC) #5-189 STORES 13

14 HOW DO SPREAD OUT? STORE 2007: FORMATS: acquisition WALMART S of 35% shares FUMBLING of Trust-Mart STORE - LOCATIONS: US$1 billion FROM SMALLER CITIES TO LARGER CITIES - 31 stores - one of the leading retailers in China EXPANSION : Wal-Mart UNTIL 2004: would SLOW capture much more competitive : advantages OPENING OF in 20 China STORES 2007: BOUGHT 35% OF TRUST-MART ==> M&A... but GROWTH it was a (AND difficult ORGANIC) integration: - Trust-Mart had significant loss #5-189 STORES - stores were renovated but their performance decreased by nearly 30% 14

15 HOW DO SPREAD OUT? STORE FORMATS: HYPERMARKETS, SUPERMARKETS & DISCOUNT (DIA) STORE LOCATIONS: BIG CITIES AND MORE PROSPEROUS AREAS. GOOD SOURCING FROM SHANGHAI (HEADQUARTERS) EXPANSION : : WARNED BY GOVERNMENT - PAUSE : FAST EXPANSION ORGANIC GROWTH: OPENING NEW STORES BUT... 15

16 HOW DO SPREAD OUT? STORE FORMATS: STRATEGY: HYPERMARKETS, EXPANSION FROMSUPERMARKETS ORGANIC TO & DISCOUNT (DIA) EXTERNAL STORE LOCATIONS: BIG CITIES AND MORE PROSPEROUS AREAS. GOOD SOURCING FROM IN JULY 2010 CARREFOUR BOUGHT 51% OF SHANGHAI (HEADQUARTERS) BAOLONGCANG. EXPANSION : WARNED BY GOVERNMENT : AN «EXCELLENT LOCAL RETAILER» - PAUSE EXPANSION ($160M) : ADD 11-30FAST HYPERMARKETS -ORGANIC FIND NEW IDEAS OF DEVELOPMENT GROWTH: OPENING NEW STORES -BUT... RETAIN THE EXISTING TEAMS - 3 YRS OBJECTIVE: RMB10 billion sales 16

17 HOW WILL THEY GROW IN THE FUTURE? RECOMMANDATIONS PURSUE EXPANSIONS DEPENDING TO OPPORTUNITIES (ORGANIC OR EXTERNAL) - CHANGE RELATIONSHIPS WITH SUPPLIERS - DEVELOP ADVANCED IS SYSTEMS - BE CAREFUL ABOUT THE REGULATIONS - KEEP GOOD RELATIONSHIPS WITH PARTNERS - CHANGE ITS DISTRIBUTION SYSTEM => LOWER THE COST OF THE DISTRIBUTION 17

18 CONCLUSION RETAIL STORE 2 BIG COMPANIES WELL IMPLEMENTED IN CHINA DIFFERENT STRATEGIES EXPANSION EXTERNAL GROWTH ORGANIC GROWTH FAST GROWING MARKET HYPERMARKETS FULFILL CONSUMER NEEDS SUPERMARKETS RETAIL STORES ONE COMMON OBJECTIVE: BECOME LEADER ON THE CHINESE MARKET 18