Carrefour Plans On Selling China Division
Recent reports claim that French retail giant is seriously looking for a way out of the Chinese market. The retail giant is reportedly considering to sell its China business and that the company is now looking for interested and potential buyers.
A report from Sina.com claims that Carrefour cites international pressure forces it to sell its Chinese operations. Following reports of Carrefour's intention to sell, speculations started to hit the market that the French retail giant is looking to sell its Chinese assets for $1 billion. The company is also offering a number of options including a sale of part of its stakes or a complete buyout. A Carrefour spokesperson denied the allegations saying that a buyout or sale is not on the company's agenda.
Based on previous reports, it would appear that Carrefour's market share in China has been on the decline for a number of years now. The company has been fighting a losing battle against China's massive e-commerce industry. Despite sealing a deal with tech giant Tencent, Carrefour appears to have missed the perfect recipe to win the Chinese retail market.
According to Carrefour's annual report, the net sales of the company's China unit dropped by about 10 percent in 2018. This represents a drop of about 3.6 billion euros.
In 2018, Tencent Holdings and local Chinese retailer Yonghui Superstores agreed to buy a stake in Carrefour's China business. This was part of Carrefour's effort to reinvigorate its local business, and also to integrate its business with local companies. Part of the deal was to use data, smart retail technologies, and mobile payments in order to counter Carrefour's decline in China as more and more consumers shift to online shopping.
In April, Carrefour announced an alliance with Chinese home appliance retailer Gome. The partnership states that more than 200 Carrefour branches across China will have Gome outlets installed.
Carrefour is just one of the recent western company to join a number of multinational consumers that have recently restructured their China businesses. Market analysts have pointed out that one of the main reasons for Carrefour's decline is the fact that Chinese consumers are more inclined towards online and e-commerce transactions. With this rumored intention to sell, Carrefour joins Metro AG which is also looking for a buyout for its Chinese business.
Back in April, Bloomberg Intelligence analyst Charles Allen said, "Alliances in China have slowed, rather than stopped the revenue decline."