Foreign supermarkets look for new strategies in China amid market challenges

September 04 , 2019

Despite U.S. retailer Costco having to close its first store in China early last week amid heavy crowds, the situation for most foreign supermarkets in China is not as rosy as it may seem.

In June, French chain Carrefour agreed to sell a majority stake in its China stores to local company Suning for $700m, The Financial Times reports. That move came on the footsteps of Britain’s Tesco and Spain’s Dia, while German wholesaler Metro is also selling its China business. 

U.S.-owned Walmart is the largest remaining wholly foreign supermarket operating in China - but after more than two decades and with some 430 stores it only has a 1.7% share of the US$692n Chinese grocery market.

According to the article, common problems faced by foreign supermarkets in China include a failure to localize and adapt to e-commerce, to soaring rental costs and disputes with local partners. 

But it says that one common weakness has been a lack of unique products. 

Hoping to China that, Walmart, Costco and Germany’s Aldi — which opened its first China stores in June - reportedly plan to focus on private label products.

This will largely be done by importing products from their home markets and by partnering with tech companies on e-commerce. 

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