Dec 11 , 2004-China opens its retail sector for majority participation by foreign retailers.

(freedom to invest independently in the cities of their choice). Foreign retailers had an edge in terms of financial muscle and better management. China¶s local retailers had profits margins of 1.2 per cent on average , while wall mart had a profit margin of 3.5 per cent According to Bain and Company , in the next 15 years from 2005, upto 20% of global retail sales growth could come from china.

Programs with the aim of increasing rural incomes and improving road and rail networks, the Chinese retail sector was becoming more attractive
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Per capita net income in rural china had increased from RMB 2622 in 2003 to RMB 2936 in 2004 Which led to an increase in purchasing power Rural population being 810 million is of great potential

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Four key strategies adopted by Wal-marts for the rural areas and 2nd tier cities of china:
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Choice and convenience Price leadership Logistics technology Localization and training

Wal mart¶s sales of $940 million in china during 2004 were less than half of Carrefour¶s sales of 2 billion dollars. Sales growth of Wal Mart was 30% where as Carrefour had a growth rate of 21% By 2005 Wal-marts target was to set up stores in each city for the next 5 to 10 years. Out of Wal mart¶s international markets ,China could provide reasonable growth as Wal-mart had better acceptance in developing markets Mexico and Brazil compared to the developed markets like Germany and Japan. Wall mart announced that it would continue its joint venture with the CITIC group .

Carrefour
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Had gained alot of ground due to rapid expansion in international markets. In China it had been successful because it was able to study the Chinese consumers through its venture in Taiwan, while Wal mart did not have any such experiential advantage. In 2004 Carrefour had 62 stores spread across 25 cities. Was planning to add another 40 stores by 2010 Investing 600m million EUROS in its Chinese operations . First western retailer to open a store in western China , Urumqi

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China Resource Retail Group Co. Ltd (local player)
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1700 supermarkets and hypermarkets Introduced its own private-label products

In 2005:
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50% of the middle and senior managers of the company¶s retail business had experience at foreign retail stores. Planned to open 4 ³lifestyle´ stores, 20 more such stores within the next 3 years.

The Home World Group (The local hypermarket chain )
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Planned to increase its store count of 69 stores in 2004 to 150 stores by 2008 Investment required $750 million

Metro
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Was planning to expand in China investment of 700 million EUROS Open 40 new stores by 2010. In 2005 it increased its stake in its Chinese Joint venture from 60% to 90% .

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