Carrefour's Singapore exit won't affect China
Updated: 2012-08-30 09:26
By Li Woke (China Daily)
Carrefour SA, the world's second-largest retailer by revenue, has assured that its exit from Singapore will not affect its operations in the Chinese market.
Carrefour China's public relations department said on Wednesday that the company will continue its development in China.
Gong Bo, an industry analyst at Beijing United Innovation Capital Ltd, said: "The company will not leave China in the short term, as China is still a promising market for retailers. Other global markets have been greatly affected by the economic crisis, but China just showed a certain level of economic slowdown."
By April, the retailer, which entered the Chinese mainland in 1995, had as many as 206 stores in 64 cities. And industry experts said the mainland's retail sector will be the most compelling market for the next decade.
Euromonitor International, a London-based consumer market research firm, said the Chinese retail industry is expected to have a market value of more than $1.4 trillion this year.
Carrefour said on Tuesday it was pulling out of Singapore with the closure of its two existing outlets in the city-state by the end of this year.
The French retail giant was the first to introduce the hypermarket concept to Singapore with the opening of its first store in 1997.
But Carrefour has found it tough to penetrate Singapore's market of 5.2 million people largely because its rivals are more entrenched with a wider network of branches, many of them strategically located within or near high-density residential districts.
Carrefour's stores are located in the city-state's main shopping and business district.
"Carrefour Singapore announces the decision to close its Suntec and Plaza Singapura stores before the end of 2012, since expansion and growth perspectives do not allow reaching a leadership position in the medium and long term," the retailer said in a statement.
It gave no details, but a senior executive with an Asian electronics company that supplies appliances to Carrefour said the decision to withdraw from Singapore came as no surprise.
Carrefour, the world's second-largest retailer behind US group Walmart, reported in March that its 2011 profit dropped by 14.3 percent to 371 million euros ($463 million) amid weaker economic conditions.
The French retailing giant had planned in 2010 to sell its business in Thailand, Singapore and Malaysia but could only attract satisfactory bids for the Thai stores, which were sold to Big C, a local subsidiary of its smaller rival Casino Guichard Perrachon, for 868 million euros.
The Singaporean market is not the first market that the company has left. In 2005, Carrefour announced the sale of its operations in Japan and Mexico.
In 2006, Carrefour sold its stores in South Korea. In 2009, the company left the Russian market, which experts believed to be a promising one.
And in June, Carrefour sold its Greek supermarket business to its local partner and pulled out of the country.
AP contributed to this story.