In China, mass distribution in difficulty

Faced with competition from online commerce, hypermarkets and supermarkets in China are facing major financial difficulties. Those who have failed to adapt to new consumption methods are finding it increasingly difficult to exist.

This is particularly the case for Carrefour, which no longer has a financial link with the French group of the same name, but which still exists in China. Question: for how much longer?

In the last Carrefour still open in Beijing, the spectacle is truly miserable. What was once a hypermarket worthy of the name is now a virtual commercial wasteland, with half-empty shelves, unlit freezers, and floors that have clearly not been cleaned. Stunned customers post the photos on social media.

Between January and June 2023, Carrefour closed 106 stores in China. The French brand is an extreme case, but its competitors are also suffering. China’s 13 listed supermarket operators still recorded poor results in the first half of this year

Competition from online commerce, but not only

The Chinese do their shopping online and have it delivered to their home. This obviously exists in many countries, but this new way of consuming has taken on considerable proportions in China, with armies of delivery men in the streets, from morning to evening. Over the first three quarters of the year, online retail sales grew by 11.6%, while in supermarkets the same figure fell by 0.4%.

The other explanation is the Covid effect: for three years, the Chinese, subject to health restrictions, got into the habit of consuming in their neighborhood, in small local shops, to the detriment of larger stores. .

To survive, mass distribution is forced to review its model. Several groups who did not see this major digital shift coming ended up entering into partnerships with online commerce giants like Alibaba. A change in strategy which has transformed many Chinese supermarkets, which have now become simple warehouses intended for online sales.