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A total of 120 stores have been closed, yet another giant wants to withdraw from China? Turn to India to purchase 64 billion goods
2021-11-29 18:38:30
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Recently, the global retail giant Wal-Mart announced the closure of its Honghu store in Luohu District, Shenzhen. It is understood that this store is Wal-Mart's first store to enter the Chinese market and represents the starting point of Wal-Mart in China. Since its opening, Honghu Store has been crowded with people. Wal-Mart's dazzling array of products meets the needs of surrounding people. After more than 20 years of development, Wal-Mart’s operations in the Chinese market are in trouble, and the number of stores closed each year is increasing day by day.
According to statistics, starting in 2012, Wal-Mart began to close its Chinese stores on a large scale. From 2012 to 2020, a total of 120 Chinese stores have been closed in 8 years. Behind Wal-Mart's continuous closure of stores is related to the declining revenue in China. According to the financial report released by Wal-Mart, Wal-Mart’s revenue in China has increased by 4.3%, but its net profit has plummeted by 40%. The Chinese market is becoming increasingly unprofitable. In fact, in addition to Wal-Mart, large supermarkets such as Carrefour, Renrenle, Pokka and other large supermarkets have unsatisfactory revenues in China, and they also close Chinese stores every year.
While closing its Chinese stores, Wal-Mart turned its attention to the rising India. In recent years, India’s economy has achieved impressive results, with a total GDP of US$2.6 trillion. In a few years, India’s total GDP will be second only to Germany, ranking fifth in the world. Against the background of great achievements, the Indian market is very active and attracts more and more foreign investment. Therefore, Wal-Mart announced that it will move its global supplier business to India and purchase US$10 billion (approximately RMB 64 billion) of Indian manufacturing in India.
Currently, Wal-Mart has only 400 stores left in the Chinese market. If revenue is still not satisfactory in the future, the possibility of Wal-Mart’s withdrawal from China cannot be ruled out. So, why does Wal-Mart, which used to have a lot of beauty, become such a thing now? Judging from the status quo of the global supply chain, affected by a series of factors, commodity prices have skyrocketed and costs have risen sharply, which has compressed the profits of supermarkets. But this is only a short-term reason, the root cause is the rise of local retailers.
In recent years, many local retailers have emerged, such as China Resources Supermarket, Yonghui Supermarket, Fat Donglai Supermarket, Wumart Group, RT-Mart and so on. These retailers are spread all over the country, competing with foreign giants for market share. Relying on local advantages, domestic retailers are gradually squeezing Wal-Mart's market share, and their performance in the retail market is getting better and better. In the end, Wal-Mart Supermarket was forced to gradually close its Chinese stores and turn to emerging markets such as India.
zhttps://www.163.com/dy/article/GQ08P0DM0515PPQC.html
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