Why Are The Four Major International Retail Giants Trapped In China?

Reporters recently interviewed a number of research shows that overseas retail giants originally had a very core management mode and business know-how. However, due to the differences between Chinese and foreign markets and consumer habits, the overseas brands such as their own brands and buying systems in overseas countries were not satisfied with their advantages and disadvantages.

Pain of mode

Due to poor performance, the high island house of a famous Japanese department store once lowered the sales target of Shanghai's High Island house. After that period, the performance problem of Shanghai's High Island house still existed. This year, some of the brands in Shanghai's High Island Department Store were withdrawn. The official explanation of the high island house was that the lease expired, while the brand side admitted that its performance was poor.

Messi department store, one of the most famous department stores in America, originally planned to try the water store in Shanghai by local developers. However, it has yet to be settled.

Britain's "time-honored brand" Marsha general store has come to adjust news at Hua Guan shop.

Reporters learned from the close proximity of the three major international retailers that their brand is strong.

This is widely recognized in the international market, and is also the foundation of the international retail giants in the European and American markets. However, the private brand model has become a development resistance in the Chinese market.

"In Europe and the United States, consumers do not attach great importance to luxury brands or have to be respectable high-end brands. They pay more attention to the products themselves. The private brand mode is directly contracted to the factory after the products are developed by themselves. The advantage of this mode is that the quality of the products is guaranteed and low cost and low price without any middleman.

This is very successful in overseas markets. "

Mr. Shen, a manager of a large retail companies who has been in charge of management for many years, told reporters that however, this private brand mode has become a problem in China. Because Chinese consumers still remain on the basis of brand recognition and popularity, many private brands are not famous. Consumers sometimes pay more attention to brand awareness than commodity quality itself, especially women's clothing and bags, and so on.

Reporters interviewed learned that Marsha general store and Gao Dao house intended to play their own brand advantages in China, but unfortunately, it has not been recognized by the public. Messi's department store is one of the main reasons why it has not yet decided to test the water store in China. It is also believed by Chinese partners that many brands of Messi stores lack the recognition of the Chinese market.

In addition, the very popular buying system overseas has also been defeated in China.

For example, the old Buddha's department store, which returned to the Chinese market, lost about HK $20 million a year.

Laowye group and fashion retailer I.T group respectively invested 50% in Paris, Hongkong, and established the Paris old Buddha's department store (China) Co., Ltd., the latest report of I.T group shows that the loss in the first half of fiscal year ended up to HK $20 million from HK $10 million 700 thousand last year.

The reason for the loss of the Department's performance in China is that its buyer system is not acclimatized.

It is understood that there are more than 500 brands of old Buddha's department store in the North Street of Xidan, Beijing, and at the intersection of Ling Hutong. There are more than more than 300 brands in the shop. Among them, the exclusive brand is the team buying from the world.

Overseas consumers are very fond of some personalized exclusive purchases, so the buying system works well.

However, Chinese consumers still like popular and famous brands and low priced goods. Buyers have not received the majority of Chinese consumers because of the small number of products, the overall brand awareness is not high and the price is high.

The most expensive way to make retailers aware of the pain in the Chinese market is the charging mode of hypermarkets.

"In the overseas market, laws and regulations are very strict. Supermarkets sell goods on the basis of the difference in the prices of goods sold. However, because of the sensitivity of the consumers to the price, the profit margin of the supermarkets is too small to rely on the price difference, so the supermarkets mostly charge various kinds of channel fees, which makes the cooperation between the suppliers and suppliers very irregular, and there is no contradiction between the supply and demand."

Senior retail expert Ding Haozhou analyzed.

Location and cost

"International retailers will have their own set of ideas in positioning, such as high-end personalization, environmental protection and green. These positioning will directly affect their operation details and management, which is also one of the reasons leading to the poor performance of some foreign retailers in China."

A manager who worked in Marsha's Department revealed that as a case of Marsha general merchandise, food was the dominant product in overseas markets, but after entering the Chinese market, because of the food import threshold and other reasons, the amount of food that Marsha general stores had in the shop was very small, most of them were clothing items.

"Too many clothing categories can lead to unclear positioning problems. For example, many Chinese consumers mistakenly think Marsha is a clothing store instead of Martha as a department store, which will lead to confusion of target customers.

In Nanjing West Road, Shanghai, the flagship store of Marsha general store is adjacent to H&M, GAP and other clothing brand shops. Originally, as a department store, especially the main food, Marsha general store and clothing brand store can compete differently. However, because of its confusion in China, it becomes a merchant of dress location, so it will be surrounded by H&M, GAP and so on.

Shop direct competition, for clothing, H&M,

The advantage of these brands is greater than that of Marsha general merchandise, which is very bad for Marsha's department store operation.

The manager said.

Besides,

Fair trade is advocated and supported in the international market. Fair trade goods are generally produced in non developed countries. Fair trade guarantees the benefits of farmers and handicraftsmen in some undeveloped regions.

"The idea itself is very good, but under this concept and positioning, some products of count's tea, British breakfast tea bags, baked coffee and so on will be fair trade goods, and will also encounter problems that are not recognized by Chinese consumers due to lack of brand awareness."

The managers pointed out further.

The biggest headache for retailers is the cost.

According to the current rent, an investment of tens of millions of dollars of hypermarkets, at least 300 thousand yuan per day turnover is expected to maintain breakeven, but many operators reflect that many stores can not reach this figure.

In addition to the cost of rent, water and electricity and marketing, compared with the local supermarket store formats, the cost of human resources of foreign companies is heavier, because the business structure of foreign investors is more complex, and the departments and staff of various departments and headquarters are far more expensive than local businesses.

At present, WAL-MART, Carrefour and Tesco have great pressure to make profits in China. That is why Huarun is considered to be Tesco after "Tesco".

After that, the adjustment of Tesco personnel in China and the recent adjustment of about 250 jobs in WAL-MART China are aimed at saving manpower costs.

In addition, Tesco, bu Lianhua and other closed parts of China's stores are also stop losses to control costs.

Mr. Shen analyzed.