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France's Carrefour Expands Convenience Store Business in China

| Nov 26, 2014 04:51 AM EST

Carrefour has opened its 20th Beijing outlet, which is now its largest store in Asia.

French multinational retailer Carrefour S.A., the world's second-largest hypermarket group in terms of sales, confirmed that it is expanding in China with its Easy Carrefour convenience chain store brand.

The first such Easy Carrefour shop to be set up in China was seen in the Minhang district of Shanghai, reported Chinese online media on Monday.

The new move by one of the world's largest hypermarket chains of stepping into the country's convenience chain store sector can be seen as part of the French giant's efforts to diversify its businesses in China, according to the Global Times.

Small is the new beautiful when it comes to China's brick-and-mortar retail businesses, according to industry experts, with many traditional hypermarkets now gradually shifting to the much smaller-sized convenience stores to offset the high costs of maintaining and operating large physical stores and at the same time keep up with the fast growth in online shopping via the so-called virtual e-tailers.

Aside from Carrefour, German retailer Metro AG is also set to launch a new convenience store format, which it will be offering as a franchise in China.

Wang Hongtao, director of communications at the China Chain Store & Franchise Association, told ECNS that traditional retailers including department stores and hypermarkets have been recording slower growth because of the impact of the slowing economy, the government's anti-corruption policies and the emergence of e-commerce.

Wang, who is also general director of the convenience store committee, added that convenience stores seemed to have been immune so far to those factors.

The association's "China Urban Convenience Stores Index" shows that the average saturation level of convenience stores on the Chinese mainland is one for every 5,000 people, compared with Japan and Taiwan where there is one for every 2,000 residents.

A study by the association covering 26 cities also found that the convenience store sector is now considered to be the fastest growing section of the retail industry with a growth rate of 19.5 percent on average in 2013, significantly higher than that of department stores and hypermarkets.

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