Find out about the retailer's strategic priorities, commercial focus areas, channel and country presence.

See data on the retailer’s performance and forecasts for its operations by channel.

This in-depth guide to China explores the key trends in grocery retail and the growth strategies of the leading retailers in the country.

Get up to speed on all of the latest retailer results, the insight into what is driving growth and IGD's five big trends to watch in Asia in 2019.

Latest News
News Feature image

Majid Al Futtaim has outlined plans to invest PKR40bn (US$256.1m) in Pakistan.

More News

French grocery retailer Carrefour has signed an agreement to sell 80% stake of its China operations to Suning.com in a deal worth about US$700m.

Carrefour may exit China completely

The transaction is expected to close by the end of 2019, subject to regulatory approval. Carrefour will retain a 20% stake in the business and two out of seven seats on Carrefour China’s Supervisory Board. However, the agreement allows Carrefour to sell the remaining 20% of its stake, suggesting an interest to exit the market entirely.

About Suning

Suning is a Chinese electronics retailer and ecommerce player. It operates more than 8,881 stores in more than 700 cities and one of the country’s largest B2C ecommerce platform. Suning said yesterday in filing to Shenzhen stock exchange, “the stake acquisition will allow Suning.com to strengthen its brand, as well as boosting its marketing capabilities, food quality control and supply chain management in the fast-moving sector”.

About Carrefour China

Carrefour has been in China since 1995 but it has been struggling to grow in recent years amid fierce local competition and the rise of ecommerce channel. The retailer operates 210 hypermarkets and 24 convenience stores.

IGD Asia newsletter

Keep up-to-date with the latest retail developments from Asia.

Sign up for our newsletter »

Carrefour China has been doing whatever it takes to revitalise its business to stay ahead amid fierce competition from both local bricks and mortar players and the ecommerce giants. The retailer has reported significant improvement (over €100m) in its recurring operating income in its Asia business in the last two years, mainly driven by Carrefour China.

What has worked for Carrefour China?

The retailer has benefited from its strategy on expanding new formats, digital revolution, testing and building partnerships and increasing productivity:

  • Smart store to make shopping easier - Le Marché is a new format that provides food and catering service in-store and great shopping experiences with lots of product discovery. Technology is widely used, especially at the checkout area. This store offers perhaps the most creative, energetic example of Carrefour’s retail innovation
  • Blending physical with digital - Carrefour China operates its own grocery shopping app with its stores being upgraded to fulfil orders. Take the flagship Gubei store in Shanghai for example, the store’s sales from ecommerce increased by five times last year. It also cooperates with three major O2O food delivery platforms Meituan, Ele.me and JD daojia to get online orders delivered in an hour or less. Gubei store pilots a 182m-long conveyor belt to save manual efforts required to transport goods within the store, as well as make sorting and delivery more efficient.
  • Easy a key format in the future - to get closer to its shoppers, Carrefour launched the Easy format in 2014. Starting as a neighbourhood store, it has now expanded into office locations, featuring ready-to-eat and fresh products
  • Partnerships - the partnerships with Tencent, Meituan, Ele.me and JD.com have helped the retailer attract new shoppers, brought in traffic and built capability. The retailer is utilising the data it collects from the 70m shoppers on its database and analysing them to better cluster customers and forecast demand. Recently Carrefour has partnered up with the Chinese electronics retailer Gome to open a total of 150 shop-in-shops in its hypermarkets by this July-end
  • Increase productivity and cut costs - Carrefour has improved its cost structure and reduced stock levels by piloting new technologies and upgrading its supply chain. It operates eight distribution centres and has tested technologies such as voice picking, which has increased productivity by 20%
  • Private label - last year alone, Carrefour launched 500 new private label products. These products are not just reasonably priced, but also feature imported, natural ingredients or sustainable sourcing

 

How can suppliers grow with retailers in transformation?

Like Carrefour China, many retailers in Asia are going through or starting their transformation journey. It tremendously changes the way retailers operate their businesses and how they work with suppliers. There are a few key areas suppliers need to consider when collaborating with retailers during such transformation.

  • Long-term objectives - understand the retailers’ strategies and long-term objectives of the transformation to identify common strategic interests. Find out more about your key accounts’ strategies here.
  • Channels and formats - think of the retailers’ channels holistically. How will the retailer meet shoppers’ needs through all their online and offline channels? What are the retailers’ growth formats? Stay up to date with the latest channel development.
  • Category strategy – identify the roles of your categories in different formats in the retailers’ portfolio. Within the category, how could you help curate the most effective range while providing superior customer experiences? What does best practice look like in-store for your category?
  • Supply chain – the supply chain flow and processes will inevitably be impacted. Suppliers could help retailers achieve early wins on a small scale, such as reducing out of stock rates or improve forecasting accuracy in selected stores. Strategic and practical case studies on supply chain management.

A successful retail transformation begins at the top, with the support from senior leaders. The suppliers need to involve their senior leadership and be more deliberate on their resource allocation when collaborating with retailers that are going through such transformation.

The company announced its annual results for 2018. Growth from its China business was substantial, with operating income up by 11 times year-on-year, reaching RMB350m (US$52.2m).

Growth driven by technology and transformation

Digitisation, acceleration of online to offline and format transformation are cited by Carrefour as its success drivers in China. Carrefour said it would stick to the “multiformat and omnichannel” development strategy as retailers are embracing innovative models to retain consumers and drive incremental sales. Below, we  review several Carrefour China’s key initiatives.

Carrefour China exterior
Source: IGD Research

Developing omnichannel stores

Carrefour’s Le Marché supermarket is the embodiment of high-tech omnichannel retailing. With a strong focus on fresh produce range, Le Marché employs a series of smart technologies to provide a smoother and more convenient shopping experience for customers in store, including:

  • Various self-serve payment, including face recognition
  • WeChat mini program scan to buy
  • Electronic price tag

There are currently two Le Marché stores in China. The first one was opened in March 2018 in Shanghai. The second one in Shenzhen was launched only two months ago in January 2019. IGD Asia has visited the store. Subscribers can view our store visit here.

Embracing mobile payment

Since its launch in 2018, Carrefour China’s “Carrefour Pay” has more than 14mn users. By the end of last year, Scan & Go technology via WeChat, has been deployed in all Carrefour offline stores in China. By end of this month (March 2019), selfserve check-out is to be rolled out nationwide.

Establishing strong online presence

Carrefour’s online platform, Carrefour Online Mall, now covers more than 50 cities across the country. Shoppers can also access it via WeChat mini programme. The retailer  teamed up with online-to-offline platforms such as Meituan, Ele.me and JD Daojia to offer express delivery. In addition, Carrefour opened its flagship store on Tmall last year, expecting to further drive its online sales.

Extending logistic coverage

The company now has six modern logistics distribution centres nationwide, which gives it a nationwide coverage, allowing better resource integration of online and offline. The retailer’s goal is to reduce transportation and distribution costs in first and second tier cities, whilst improve assortment and increase product range in third and fourth tier cities.

Forming new partnerships

Carrefour and Gome, one of China’s largest privately owned electrical appliance retailers, formed a partnership in 2018. The first 11 stores were opened under this partnership in four cities, Beijing, Shanghai, Wuxi and Hangzhou.

China is a retailing laboratory for the world,” said Thierry Garnier, president and CEO of Carrefour China. “For Carrefour, China is a specific market that has helped us to learn and to understand the future.”

The company currently has 245 outlets in China. Globally, Carrefour increased its sales by 1.4 per cent to reach €85bn. 

 

 

IGD Asia newsletter

Keep up-to-date with the latest retail developments from Asia.

Sign up for our newsletter »

Carrefour has opened its second Le Marché supermarket in Shenzhen, China.

Fresh Workshop in-store

After launching its first Le Marché supermarket in Shanghai in April last year, Carrefour has now opened a second store in Shenzhen. In the new store is a Fresh Workshop area, providing shoppers convenience and fun. It combines retail and foodservice, allowing customers to purchase fresh and live seafood and have it prepared so they can dine in-store.

Why Shenzhen?

It is not surprising to see Le Marché open in Shenzhen, having agreed an alliance to partner and collaborate with Tencent to work together on data, smart retail and payment technology this time last year - it is also where the the tech giant is headquartered.

Why you should visit?

  • Experience the latest concept in omnichannel retail from Carrefour
  • Various payment technologies on display in-store
  • A perfect blend of retail and foodservice within a smaller footprint store

Want to know more?

Subscribers can view our Carrefour Le marché store visit here.

We've developed a single, universal methodology for calculating food and consumer goods retail data, supported by our programme of primary and secondary research. This makes Datacentre the most reliable and robust source available for data of this type. 

Subscribe now to start receiving our wide range of newsletters, bulletins and updates.