Carrefour's global president announces biggest changes to 100 cities in China

March 5, in the Carrefour China Shanghai headquarters, less than 3 years of office of the Global Vice President of Carrefour Group, China's president and CEO Tanggianen (Thierry Garnier) announced will launch the 20 years of the largest change in China.

Wang Yaqian, new financial journalist

Three major directions

After 18 months of brewing, Carrefour will finally usher in the largest reform in China in 20 years. March 5, Carrefour in Shanghai headquarters held a small media communication meeting, announced Carrefour China previously low-key dark line 1.5 more strategic plan.

"We currently have 238 hypermarkets in more than 70 cities in China, with 60,000 employees and 20 million members," the company said. Our goal is to be stationed in China in about 100 cities in the next 3 years. Tanggianen at the meeting, "to complete such a goal, we have formulated the development of China's three new directions, that is, the main shopping malls to more cities, especially the potential of the three or four-line expansion." Although we all say that the market is lower, I think many new markets still have a chance. The second is to develop Carrefour Easy convenience store new business, at present, there is only one shop in Shanghai, we test the results of the operation is good, we will first in Shanghai and other front-line cities to expand convenience stores, and then expand throughout the country, our convenience store area between the standard supermarkets and convenience stores, Built-in dining and other ancillary services, this is different from the general convenience store. The third direction is about to start our electrical business. ”

10 years ago, the entire industry has nearly 30% growth, but from nearly three or four years, the "growth rate for the history of the lowest" word frequently appeared in the analysis of the major reports, according to the China Chain Management Association published data, 2013 large-scale comprehensive super and supermarket growth rate of only 7.8%.

As the leading FMCG retailer in the Chinese market, Carrefour's search for change seems slow.

In recent years, Carrefour China to "big store China's godfather," the leader posture to adhere to the impact of many industries and consumption changes in the supermarket industry, in Wal-Mart and most of the retail competitors embrace E-commerce on the road to transition, suffer a lot of failure to keep up with the times of doubt.

Carrefour, the world's main competitor, Wal-Mart, has been approved by China's Ministry of Commerce in August 2012 to buy 1th stores, thus successfully laying the field of electrical business. In addition, in China's fast consumer goods retail ranking leading companies such as Huarun Group, have already implemented changes to deal with the trend of the decline in the business situation.

Procurement centralization

In the face of many challenges, Carrefour may be slow to force the reason is that its own lack of logistics supply chain system.

Earlier, in order to faster than its competitors in China to complete the strategic layout, Carrefour broke the conventional centralized procurement management system, took a single shop decentralization, shop long responsibility System "decentralized" mode of administration, giving stores a lot of power, so that each store has an independent procurement and sales system, logistics costs are very low, Carrefour has become the fastest-growing "bellwether" for foreign retailers in China.

Although the move for Carrefour to win the development of time and consumer favor, and in the high-speed development behind, but to the procurement of corruption has created an opportunity to hold the "power of life and death" of the procurement Middle has considerable authority.

As decentralized procurement has entered a bottleneck, it has been agreed that convenient and flexible procurement methods are difficult to prevent corruption, coupled with a monopoly of regional procurement, which makes it difficult for some high margin and high interest rate products to enter the hypermarket.

Tanggianen announced that Carrefour will fully implement the new procurement and logistics of the organizational structure, that is, the current national 24 CCU (Urban Commodity Procurement Center) will be merged into 6 major regional procurement centers, the procurement center of the major cities in Shenyang, Beijing, Shanghai, Wuhan, Chengdu, Guangzhou, 6 procurement centers are respectively corresponding and belong to Carrefour northeast , north China, east China, central China, Huaxi, South China 6 large areas.

That means Carrefour China began a revolutionary revolution in its overall business from the back-end of "commodity sourcing" – the main axis of the retail wheel – 20 years after entering China.

In simple terms, Carrefour China will implement the separation of procurement and store management operations, after 20 years in China's CCU City Procurement Center system will once again "centralization", the newly established 6 Regional Procurement Center will assume previously scattered in 24 cities nationwide Carrefour China's commodity procurement rights, And the 6 chief will no longer be responsible for the purchase of goods, but only the whole heart into the store operation management.

"Of course we are aware of the staff problem, there will be a lot of new jobs in the merger process, we now need to recruit 3,000 employees, so all the staff involved in the adjustment we have no intention of downsizing, they can adjust to the new position." This year we will also be promoted to 15 regional-level management staff, about 75% of whom are Chinese employees. "Tanggianen revealed.

Opportunity Challenge

For such a traditional retail giant, the new battlefield of electricity business also means to change the business thinking.

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"First of all, goods, online and offline goods must be different, and in the marketing must pay attention to the on-line characteristics, such as pictures to highlight the details." However, the real operators lack the concept of electrical business operation, usually simple rough ground a panoramic view, which greatly affects sales. And the most fundamental problem is the cost of distribution, supermarket stores, the customer price is very low, and sometimes the distribution cost is higher than the price of sales, selling a single loss, which is also leading to Auchan and other industries have once suspended the main cause of business. And with overseas electric business, entity shop price consistent, delivery needs and other modes of charge, the Chinese electricity market price war is serious, in order to win opponents, almost all businesses are covered by mail, free shipping. This has increased the distribution cost of the real operators in transition. "A senior person who has been at the top of a foreign retail business said. "If it's an ordinary retailer, it's too late to do it now, but as a retail giant, Carrefour has a chance," he said. However, foreign-funded enterprises in China to do electricity, will inevitably encounter the problem of acclimatized. "O2O industry analyst Huang said to the new financial reporter.

At the same time, for Carrefour, the electric business platform is not only linked to the hypermarket, but also the second half of last year to join Carrefour China business layout of the convenience store model--carrefour easy. Data show that 2013 China's retail industry continued to suffer from slowing economic growth, department store overall growth rate of 9.6%, large-scale comprehensive super and supermarket growth rate of 7.8%, while the convenience store trend of growth, 15 major representative enterprises sales growth of 18.2%, far higher than other business.

For Carrefour easy positioning, the current Carrefour will continue to expand the scope of the lock in the big cities, "because of large urban population flow, customer single consumption price is higher, and large cities aging more obvious." Tanggianen said that the difference between the neighborhood and the hypermarket model was closer to the community and more convenient. Although Carrefour easy to open in the second half of last year, Carrefour in the future hopes to quickly implement and open more stores.