A row of Carrefour shopping trolleys at the entrance to a Beijing outlet of the French retailer. (XU YIN / CHINA FOTO PRESS)
Retailer embarks on strategic expansion on the back of high sales
The night time craze was symbolic of the retail giant’s strong performance in China. Claudio Gouveia, vice-president of Carrefour China and also general manager of the North Territory of Carrefour China, said the country has become one of the most significant and also fastest-growing markets for the retailer.
Carrefour last year pulled out of Russia and southern Italy amid the economic meltdown following decisions to quit Japanese, South Korean and Mexican markets in 2005 and 2006, because of “unsmooth operations”. It sold its stores to local enterprises.
However, the retailer maintained steady expansion in China. Gouveia said that Carrefour opened 22 new stores in 2009, boosting the total number of outlets to 157 across the country. It plans to open 20 to 25 new outlets this year.
He added that the company was satisfied and very optimistic about its business in China because the country’s household consumption rates have been high.
In the past year, Carrefour benefited a lot from the stimulus measures, introduced by the Chinese government. For example, the authorities subsidized energy-saving household appliances in an effort to encourage their purchase.
Gouveia said Carrefour had a very clear strategic plan for the Chinese market and would be focusing on constructing hypermarkets with an average size from 6,000 sq m to 11,000 sq m.
The company was making great efforts to balance its presence in big cities and also second and third tier cities. It has been operating its retail business in 45 cities across China.
“Currently, Carrefour has a good presence in big cities while more new stores will be in second and third tier cities,” said Gouveia.
The French company will be the first international retailer to enter the Inner Mongolia autonomous region, where it plans to build a new outlet in 2011.
The retailer plans to develop its China-based outlets alongside the construction of local infrastructure and arrival of new businesses. “For instance, there will be a new airport in the Daxing district of Beijing’s southern suburb and there may be a new outlet nearby. I believe we have many opportunities in this area,” said Gouveia.
In response to its rival Wal-Mart, which is planning to build about 50 new stores each year, adding to its current total of 160 outlets, Gouveia said the focus of Carrefour was to keep a good balance between the rhythm of expansion and the quality of the stores.
Chinese Luxury Shoppers Outspend Japanese 2-To-1 At South Korean Malls: Wealthy Chinese Travelers In Korea Favor Cosmetics, Children’s Supplies, Ginseng And Healthcare Products, Luxury Watches – This week, more news about free-spending mainland Chinese tourists came out of South Korea. As more Chinese tourists have headed outward, most of them staying relatively close to home, the Korean media has consistently framed news about tourist behavior as a sort of rivalry between China and Japan — a phenomenon Jing Daily discussed last fall. (’Tourist Profile: Japanese vs. Chinese‘) According to Tencent (via Yonhap), after a year in which the number (and profligacy) of Chinese tourists increased at Korean luxury malls, shoppers from mainland China now account for twice as many sales per capita as Japanese tourists.
Hummer price soars in Shanghai: Although Tengzhong failed in buying Hummer, the Hummer dealers are overjoyed, taking the opportunity to raise the price. On February 25, the reporter learned from Hummer dealers in Shanghai that after hearing the acquisition of Hummer failed, dealers immediately raised the price of Hummer, among which Hummer H3X produced in 2009 rose by 20,000 yuan, and Hummer H2 is planning to rise by 100,000 yuan. (Via Business – People’s Daily Online.)
Calvin Klein To Focus On Chinese Market In 2010: American fashion brand Calvin Klein has announced plans to open 60 new chain stores in Asia in 2010, mainly targeting its expansion in the Chinese market.
According to reports from Singapore’s Channel News Asia, Calvin Klein’s current revenues from the Asian areas account for 15% of its income worldwide. (Via ChinaRetailNews.com.)
Toyota chief’s testimony closely watched in Japan: Japan appeared largely relieved Thursday that much-anticipated testimony by Toyota’s chief executive before U.S. lawmakers was finally over, though analysts said the company’s recall woes are no closer to being solved. Toyota Motor Corp. President Akio Toyoda’s appearance before the House Oversight and Government Reform Committee, was closely watched in Japan, where the company his grandfather founded is a national icon. It was the top item on local morning news programs. At least one channel briefly broadcast his testimony live, where it took place Wednesday in Washington. (AP) (Via News On Japan.)
Singapore Witnesses Record Number of Travelers in January: January of 2010 managed to see the highest ever recorded number of travels to Singapore for the month. Figures shared by the Singapore Tourism Board have revealed that as many as 908,000 travelers visited Singapore over the past month, which is a hike of nearly 17.5% compared to January of 2009. The top 5 markets for the month which generated visitors for Singapore were Indonesia with 173,000 visitors, China with 99,000 travelers, Australia with 90,000 travelers, 68,000 came in from Malaysia and 57,000 travelers were from India. (Via TopNews Singapore.)
Hong Kong clothing retailers threaten to quit Taiwan over tax issue: Taipei – Four Hong Kong clothing retailers are threatening to quit Taiwan over a tax dispute with Taiwan authorities, a press report said Monday. The four Hong Kong retailers – Hang Ten, Giordano, Bossini and BaLeNo – made the threat in a petition to President Ma Ying-jeou, demanding that their names be cleared, or they might withdraw from Taiwan, the United Daily News quoted Lai Shih-pao as saying. (Via China News.)
Hainan to curb ‘whopping housing price’: As of the phenomena that the ‘whopping prices’ for living in hotels in Hainan Province ‘bluff off’ the tourists during the Spring Festival, the government would takes efforts to regulate the market, Wu Kunxiong, deputy director general of the tourism department of Hainan Province said Saturday. The government will strictly crack down on the house speculators and formulate tourism standards to cope with the high prices, according to Wu. (Via Business – People’s Daily Online.)
Revenue From Beijing’s Five-star Hotels Beijing Down 16.9% In 2009: According to data provided by Bureau of Statistics of Beijing, the revenue of star-grade hotels in the city decreased by 9.7% year-on-year in 2009. During the entire year of 2009, star hotels in Beijing made total revenues of CNY21.94 billion, including CNY9.98 billion from guest rooms. (Via ChinaRetailNews.com.)
APEC seeking pathways to Asia-Pacific free trade area: Senior officials from Pacific Rim economies accelerated their efforts Monday to seek ”possible pathways” to a region-wide free trade zone, but fell short of reaching any consensus except to continue necessary work. After a meeting in Hiroshima, where Japan formally took up its chairmanship of the Asia-Pacific Economic Cooperation forum for 2010, a Japanese official said, ”We already have very sensible analytical studies but also have lots of issues that require further discussions.” (Via Kyodo News (Business).)
Asia leads global march away from easy credit: (HONG KONG) The US Federal Reserve has just kick- started its cautious exit from unprecedented emergency lending measures – but the process has been going on for months in the Asia-Pacific region, underscoring the two-speed path of the global recovery. (Via Business Times Online – All The Headlines.)
Nathan Road, Hong Kong (photo: Randal Rayborn)
HK retail sales value grows 16%: The city’s total retail sales value for December has been provisionally estimated to be 29.4 billion HK dollars, up 16 percent on the same month last year, the Census and Statistics Department of Hong Kong said Monday. After netting out the effect of price changes over the same period, the volume of total retail sales grew 11.3 percent. The sales volume of jewelry, watches and clocks, and valuable gifts increased the most, by 30.4 percent, followed by motor vehicles and parts at 29.8 percent. (Via Business – People’s Daily Online.)
Kodak Enhances Its Manufacturing Facilities In China: Kodak is opening a second production line for its Xiamen printing plate manufacturing facility to enhance the company’s manufacturing capacity for offset products. The manufacturing line in the southern Chinese city will produce CTP plates for sale in Asia and support the development of current and new products. (Via China Sourcing News.)
HSBC Report: Men Key To Luxury Spending In China Today; Women Tomorrow: In the new book ‘Luxury China: Market Opportunities and Potential’ (Jing Daily review), Chevalier and Lu note that the Chinese luxury business is still very much dominated by middle-aged men, most of whom splash out on high-priced luxury goods with the intention of giving them as gifts. However, as the authors point out, over time we can expect to see a gradual shift in power from male to female consumers. (Via Jing Daily.)
Parcel south of Bund sets realty records: A 57,000-square-meter plot sitting south of the historic stretch of the Bund finally fetched 9.22 billion yuan (US$1.35 billion) yesterday and became the most expensive parcel in Shanghai by both total and average price. Privately owned Shanghai Zendai Property Ltd emerged as the winner of the plot after beating three domestic rivals. The plot, with a starting price of 9 billion yuan, was sold for an average price of 34,148 yuan per square meter, also the highest on the Chinese mainland so far. An entity consisting of China Enterprise, China Pacific Life Insurance and Taikang Life Insurance; Shanghai New Huangpu (Group) Co Ltd; and another entity led by Shanghai Forte Land and Shanghai Fosun were the three other participants in yesterday’s competition. The site is in an area of the Bund that the city wants to turn into a center dominated by financial institutions – part of a city master plan to turn Shanghai into a global financial center by 2020.(Via Shanghai Daily: Business.)
Asia-Pacific biggest air travel market: The Asia-Pacific region has overtaken North America as the world’s largest air travel market. The International Air Transport Association said 647 million passengers flew in the region last year, compared with 638 million in North America. Within Asia, China has eclipsed Japan over the past decade as the largest domestic market. And IATA says the Asia-Pacific market will continue to grow rapidly. (Via RTHK On Internet – Finance News.)
Coach To Open First Mainland Flagship Store In Shanghai: The American luxury accessories designer and maker Coach has announced plans to open its first Chinese mainland flagship store in Shanghai in April 2010. Located at the junction of Shanghai’s Huaihaizhong road and Songshan road, this new flagship store covers an area of 650 square meters and was designed by Coach’s construction and design team. (Via ChinaRetailNews.com.)
7 For All Mankind To Open Four New Locations In China: 7FAM will open four new stores in China this year, in Beijing, Shanghai and two other as yet undetermined cities. Denim is big business in China, and has been since the early 1980s when the first waves of post-Mao fashions swept through Chinese cities. In more recent times, premium denim makers from around the world have seen demand soar in top- (and now second-) tier cities, and brands like Miss Sixty (Italy), ONLY (Denmark), Diesel (Italy) and G-Star (Holland) have opened retail outlets and in-store boutiques throughout the country. In 2007, American premium denim maker 7 For All Mankind entered the mainland market, and since then has established locations in Beijing, Shanghai, Wuhan, Dalian, Hangzhou and Chengdu. This week, in an interview with China Daily, Vice President of VF Asia (the Asian office of American apparel monolith VF Corp, which owns 7 For All Mankind) Raffaele Germano said the company plans to open four new retail locations in China over the course of 2010, with one store each slated for Beijing and Shanghai, with the other two locations to be determined. (Via Jing Daily.)
Sony to shadow Apple store strategy in Japan: Sony this week outlined a plan to fight back against Apple by opening its own flagship retail stores. Starting with Sony Store Nagoya, the stores will imitate the multi-floor design of Apple flagships like Ginza and use large, spacious display areas divided by category. The first floor of the Nagoya store will focus on portable devices like Cyber-shot and Handycam cameras, the PSP, Sony-Ericsson phones, Walkman players and VAIO PCs; a second floor will focus on home theater equipment such as Blu-ray players and TVs. (electronista.com) (Via News On Japan.)
Toyota to suspends sales, production of 8 models with accelerator issues: In what was described as the largest such move ever by an automaker in the United States, Toyota said Tuesday that it had halted sales of eight models of its cars and trucks that account for more than half its U.S. sales until it could find a fix for sticking accelerator pedals under a safety recall. The move, which will cut production starting Monday for at least a week at seven Toyota plants in North America, comes six days after the Japanese automaker announced the recall of 2.3 million vehicles due to the accelerator problem that it first encountered in 2007. (mercurynews.com) (Via News On Japan.)
Proposal to ban dog, cat eating sparks debate over China’s culture: Researchers of a Chinese government think-tank have defended their proposals to ban the eating of dogs and cats in the face of criticism that it would destroy local traditions. A proposed anti-animal abuse regulation suggests a prohibition on cooking dogs and cats with the risk of a 5,000-yuan (732 U.S. dollars) fine or even imprisonment. (Via China – People’s Daily Online.)
UPS Adds 101 New Locations In China: UPS plans to increase its global service parts logistics network significantly, by establishing 101 new field stocking locations in China. According to Brad Mitchell, the president of UPS Logistics and Distribution, UPS China is a critical part of the growth strategy of many companies worldwide and UPS’s regional and global FSL network is positioned to support these companies after-market needs in Asia. He pointed out that the UPS network was already the world’s largest logistics network. (Via China Sourcing News.)
Singapore’s retail sales down 1.4% year-on-year in Nov 2009: Singapore’s retail sales decreased by 1.4 percent in November 2009 compared with a year ago, according to Singapore Department of Statistics on Friday. Turnover of motor vehicles in November 2009 decreased by 16 percent, while food and beverages sales fell by 3.1 percent over a year ago. In contrast, sales of watches and jewelry, medical goods and toiletries, furniture and household equipment increased by between 7.2 percent and 14.8 percent. (Via Business – People’s Daily Online.)
Google’s loss could be Baidu’s gain: Domestic search firm Baidu Inc could be the biggest beneficiary of a possible pullout from China by Internet major Google, leading industry experts said yesterday. The NASDAQ-listed Baidu already dominates the Chinese search landscape and it has signaled its intentions to spread wings, even before Google hinted at a pullout. The California-based Google could see an exodus of advertisers from the Chinese mainland and see them switching to Baidu. (Via Business – People’s Daily Online.)
Mainland Chinese Tourists Spent $42 Billion Overseas In 2009 – Mainland Tourist Spending Abroad Outspent International Tourist Spending In China For The First Time: Chinese Media is reporting this week that outbound tourists from mainland China spent some $42 billion overseas (including Hong Kong, Macau and Taiwan) last year, outspending inbound international tourists for the first time. Though articles do point out that the majority of first-time outbound tourists from the mainland went to nearby Hong Kong (18%) and Macau (16%) — two very accessible destinations for Chinese tourists, who typically travel there for quick weekend jaunts or shopping sprees — more of them are heading to more distant locales, staying longer, and spending more. (Via Jing Daily :.)
Taiwan Semiconductor to hire 3,000 engineers amid expansion: (ChinaPost.com.tw) – Taiwan Semiconductor Manufacturing Co., the world’s largest custom-chip maker, plans to recruit more than 3,000 engineers this year as the company expands. (Via Taiwan Headlines – Business.)
Burberry ION Orchard, Singapore - coming soon to China
She told Xinhua in a foreign journalist press conference that Burberry would increase its investment in emerging markets, especially in China, because the country has a huge purchasing potential.
So far, the company has operated 90 stores in emerging markets, the majority of which are currently under franchise. In China, the company has 44 franchise stores now, following seven openings in the first half of the financial year.
Ahrendts said that Burberry is continuing to perform well in China, with strong double-digit comparable store sales growth in the first half.
In addition, the company is also planning to increase its presence in the Americas. – read more at chinaview.cn…
A lone customer selects Christmas decorations at IKEA. (China Daily)
Tianyi market, the largest wholesale market in Beijing with more than 3,000 traders selling everything from buttons to jewelry, is busy preparing for Christmas.
Li Qingfu, the deputy general manager of Tianyi, told METRO: “Christmas and Spring Festival are the two major shopping seasons in Beijing. In our market, we estimate that a throughput of goods for Christmas season alone will be close to 100 million yuan.”
A 4-m-tall Santa Claus has been welcoming shoppers from the roof of the market since early November, and Christmas decorations and lights already decorate the market’s first floor.
But a trader in the market surnamed Ge is not so optimistic. He put out Christmas items on shelves on Nov 7, 10 days earlier than previous years in a move to counter reduced consumer spending.
Ge said: “Since the exports of Christmas goods have been so drastically influenced by the global financial crisis, I decided to start selling decorations earlier and avoid market competition.”
Ge said he has a customer in the US who used to order as much as 1 million yuan of Christmas decorations every year. This year the customer cut the order in half. – read more at ChinaDaily.com…
Hong Kong's Harbour City
The Canton Road shopping center in Tsim Sha Tsui is hoping the spike in sales will continue and has budgeted HK$13 million for Christmas promotion.
“This growth could be attributed to the revival of consumer confidence,” assistant general manager (leasing) Canis Lee Lai-yi said yesterday.
According to her, the growth in the first six months was rather slow at 6 percent, but it bounced back strongly as shoppers have adapted to the human swine flu pandemic and signs of economic recovery have surfaced.
Lee said based on the current performance and the expected surge in retail sales in the Christmas peak season, annual retail sales are likely to break last year’s record of HK$13.4 billion.
The rent for new tenants and renewed leases has increased 25 percent, with the per- square-foot rents starting at HK$200 to HK$600 or even higher.
Lee said as long as sales are satisfactory, tenants are willing to pay a reasonable rent.
Lee does not consider the opening of more malls in the area as a threat to Harbour City since the formation of a retail cluster will boost the appeal of Tsim Sha Tsui as a shopping destination for tourists. read more at The Standard…
Carrefour store in Taipei
The Supreme Administrative Court upheld the decision against Carrefour for claiming it checked its price lists daily and immediately lowered the price of items found to be more expensive than competing stores, a court official said.
Despite the claim, made on Carrefour’s website and in its catalogues, four of its outlets failed to charge the lowest prices, the Fair Trade Commission found earlier.
Following its decision, made in 2006, the commission slapped a fine of 4.44 million Taiwan dollars (138,000 US dollars) on Carrefour for making untruthful and misleading statements on its pricing. read more at asiaone business…
