Carrefour China concentrating on convenience

Carrefour China says it will concentrate on convenience store development for the rest of this year.

The French-headquartered retailer has been losing market share in the hypermarket segment and has closed about 30 stores during the past three years. It is trying to find a new growth model for the competitive Chinese model according to IGD analyst Catherine Ellwood and IGD Singapore program director Shirley Zhu.

Hypermarkets will still play a role for Carrefour, particularly in western and central China, they say. The retailer is changing focus because of the increasing challenges for hypermarkets.

Carrefour reportedly plans to open 40 to 50 convenience stores in Shanghai as well as about 15 Carrefour Easy stores by the end of the year.

Rapid urbanisation, smaller families and rising affluence levels mean Chinese shoppers are demanding more convenient solutions, says the IDG team.

“Convenience stores present a huge growth opportunity, but winning in this sector under rising costs and fierce competition is not an easy task.”

However, Carrefour does have the advantage of existing sourcing and supply-chain capability for fresh products. Daily delivery from its own fresh distribution centre ensures availability and quality.

A typical Carrefour Easy store has a floor size of 250 to 300 sqm with plenty of room for fresh produce displays. The stores act as pick-up locations for online shopping, and have kiosks to provide various services. There is also free Wi-Fi and charging devices in-store.

For mobile payment alone, the stores accept Alipay, Apple Pay, Samsung Pay and WechatPay.

Carrefour opened an extra distribution centre in June. The 21,000 sqm centre, in Dongguan, Guangdong province, will help with expansion in south China. Carrefour aims to have six distribution centres by the end the year.