m Dec 11 , 2004-China opens its retail sector for majority participation by

foreign retailers.(freedom to invest independently in the cities of their

choice).

m Foreign retailers had an edge in terms of financial muscle and better

management.

m 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

m According to Bain and Company , in the next 15 years from 2005, upto
20% of global retail sales growth could come from china.
m =rograms with the aim of increasing rural incomes and improving
road and rail networks, the Chinese retail sector was becoming
more attractive

x =er capita net income in rural china had increased from RMB 2622
in 2003 to RMB 2936 in 2004

x Which led to an increase in purchasing power

x Rural population being 810 million is of great potential

 —
 
     

       

x Choice and convenience

x =rice leadership
x Logistics technology
x Localization and training
m Wal mart¶s sales of $940 million in china during 2004 were less
than half of Carrefour¶s sales of 2 billion dollars.
m Sales growth of Wal Mart was 30% where as Carrefour had a
growth rate of 21%
m By 2005 Wal-marts target was to set up stores in each city for the
next 5 to 10 years.
m 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.
m Wall mart announced that it would continue its joint venture with
the CITIC group .
m | 

x ÿad gained alot of ground due to rapid expansion in international
markets.
x 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.
x In  Carrefour had 62 stores spread across 25 cities.
x Was planning to add another 40 stores by 2010
x Investing 600m million EUROS in its Chinese operations .
x First western retailer to open a store in western China , Urumqi
m | 
 
| 
    
x §  supermarkets and hypermarkets
x Introduced its own private-label products
In !G
x 50% of the middle and senior managers of the company¶s retail
business had experience at foreign retail stores.
x
x =lanned to open 4 ³  stores,
x 20 more such stores within the next 3 years.
m Ñ"  
Ñ    
 
x =lanned to increase its store count of 69 stores in 2004 to 150 stores by 2008
x Investment required $750 million

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