Multinational Retail Chains & the China Opportunity

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Case Details:

Case Code : BENV018
Case Length : 15 Pages
Period : 2001-2008
Pub Date : 2008
Teaching Note :Not Available
Organization : Carrefour/ Tesco/ Wal-Mart
Industry : Retail
Countries : China

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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One of the markets that has attracted several MNC retail chains is China.

Though the average consumer spending per capita is low compared to more developed markets, the strong growth of over 10% per annum in consumer spending per head and the huge size of the market make China very attractive to the MNC retail chains.3

With the Chinese government opening up the retail industry in 1991 and introducing further reforms in the early 2000s, the attractiveness of the Chinese market has increased manifold.

As of 2008, China is one of the largest retail markets in the world. For the month of June 2008, retail sales in China touched a record US$126.7 billion (864.2 billion Yuan4), according to the China Chain Store & Franchise Association (CCFA).

After being adjusted for inflation, this represented a growth of 14.8%.5

Not only was China one of the top retail markets by value, but it was also one of the top retail markets in terms of its ability to attract international retailers.

As of early 2008, around 40% of the international retailers were present in China, earning it the ninth position among the top 10 retail markets in terms of ability to attract international retailers (Refer to Table I for the top 10 global retail markets)...

Excerpts >>

3] "Top 10 Global Retail Markets,", April 3, 2008.

4] As of August 2008, 1 Yuan was approximately equal to US$ 0.146, 0.080, and € 0.099.

5] "China Retail Sales Crack 864b Yuan,"Sanghai Daily, July 31, 2008.


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