Carrefour China profit up by 11 times

Date : 05 March 2019

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 »