Case analysis of Carrefour's failure in Hong Kong

Following the closure of Yaohan and Zhongma Maru department stores in Hong Kong at the end of 1997 and 1998, on September 18, 2000, all four supermarkets of Carrefour, the world's second largest supermarket group, in Xinghua Village, Tsuen Wan, Tuen Mun and Yuen Long in Hong Kong closed down and evacuated from Hong Kong.

French Carrefour Group has more than 5,200 branches in 26 countries and regions around the world, with annual global sales of $36.3 billion, profits of $760 million and more than 240,000 employees. Carrefour's large supermarket chains in Taiwan Province Province, Shenzhen, Beijing and Shanghai are doing well. Why does it single out Hong Kong?

Carrefour said that the reason for the closure was the fierce competition in the Hong Kong market, and it was difficult to find a suitable place to open a large supermarket in Hong Kong, and it was difficult to gain enough market share in the short term.

Carrefour's bankruptcy liability can be analyzed from two aspects:

1.？ From its own point of view

First, Carrefour's "one-stop shopping" (allowing customers to buy everything they need at one time) is not suitable for the narrow and densely populated shopping environment in Hong Kong. Carrefour's shopping concept is based on spacious places, which runs counter to the social environment in Hong Kong. Obviously, resources are not used properly. This reflects Carrefour's shortcomings in adapting to Hong Kong's social environment.

Second, Carrefour has no property in Hong Kong, but it needs tens of thousands to 65438+ ten thousand square feet (1 foot: o 305 meters) to operate, and it is burdened with huge rents. At the same time, it is restricted by the lease. When it becomes a momentum, the lease will be full and competitors will take it away at a higher rent. Carrefour's original advantage was all-inclusive, but its competitors quickly imitated it, and this advantage gradually lost.

In addition to the four branches that have already opened, Carrefour has rented more than 300,000 square feet of floor space in the new city center of Tseung Kwan O and the new port city center of Maanshan, but it has never been opened, which has also brought it a heavy economic burden.

Thirdly, Carrefour has 20 branches in Taiwan Province Province, which can form a distribution scale, but there are only four branches in Hongkong, which directly leads to relatively high distribution costs. During its March into Hong Kong, it also had some disputes with suppliers and almost resorted to law.

2.？ From the outside,

First, when 1996 entered Hong Kong, it happened to be the most expensive period in the history of Hong Kong, and its operating cost was high, which was a heavy pressure for Carrefour to win at a low price. Unfortunately, during this period, it was hit by the Asian financial turmoil, and Hong Kong's economy was also hit hard. Carrefour has been unprofitable due to deflation in recent years.

Secondly, the price reduction wars initiated by local supermarket groups in Hong Kong such as Baijia, Wellcome, China Resources and Apple Fast Retailing have dealt a heavy blow to Carrefour's operation. As an internationally renowned supermarket group, Carrefour took the initiative to participate in this two-year price reduction war. However, the competitive price reduction of several local supermarket groups finally made Carrefour unbearable and failed halfway into Hong Kong.