Click to read the original text for details Recently, Uni-President Group has made another major move. According to Taiwanese media reports on the 20th, Uni-President Group held a press conference late on the 19th, announcing that it had spent NT$29 billion to acquire all shares of Carrefour Taiwan. At the exchange rate on that day, this is equivalent to approximately RMB 6.554 billion. It is reported that after the transaction is completed, Uni-President will hold 70% of Carrefour Taiwan's shares, and President Chain Store will hold 30%, with the deal expected to be finalized by mid-2023. Uni-President Group will thus firmly hold the leading position in Taiwan's retail industry. With this, the Carrefour Taiwan deal has been settled, and Carrefour has become a 100% Taiwanese-owned enterprise. Image source: Internet 01 Carrefour, Settled In fact, before the acquisition of Carrefour Taiwan, rumors of Carrefour store closures had repeatedly become reality. In March this year, Carrefour in Zhongguancun, Beijing, officially closed its doors. This hypermarket, which had been operating for 18 years and covered 32,000 square meters, was once Carrefour's largest flagship store in Asia. The closure of the Zhongguancun Carrefour is not an isolated case. In recent years, well-known hypermarket brands that were once familiar to the public have closed stores one after another. Lotte Mart from South Korea, Dia from Spain, Auchan from France, and Tesco from the UK have withdrawn from the Chinese market. Thailand's Lotus has massively closed stores in China and delisted from the Hong Kong stock exchange. Chinese local supermarket brands have also closed stores one after another. Carrefour and Metro, which had no improvement in their Chinese business, were taken over by Suning and Wumart. In recent years, Carrefour and Walmart have also been forced to close stores continuously... The traditional supermarket business model, represented by the hypermarket model, seems to have reached the edge of a cliff. Clearly, in the past decade, hypermarket formats such as Carrefour, Walmart, Jiajiayue, Renrenle, RT-Mart under Gaoxin Retail, and Rainbow have suffered the most severe impact and have declined significantly. Why? Hypermarkets have been diverted. In 2012, the rise of the O2O model began to impact hypermarkets. In recent years, comprehensive e-commerce platforms have launched instant home delivery services for fresh produce and daily necessities. Fresh food e-commerce companies like Dingdong Maicai and Miss Fresh, which use the front-warehouse model, have also taken a significant share of supermarket business. Since 2020, community group buying, which emerged due to the pandemic, has further intensified competition. In addition to the above reasons, various small and medium-sized supermarkets that have emerged around community needs have also diverted traffic from hypermarkets. This continuous "segmentation" also opened the path for Carrefour store closures. Starting in 2022, four Carrefour stores that had been operating for nearly 20 years announced closures. In 2021, Carrefour closed at least 20 stores nationwide. In June 2019, Suning.com acquired 80% of Carrefour China for 4.8 billion yuan, and Carrefour officially withdrew from the mainland Chinese market. Now, with Carrefour Taiwan being acquired by Uni-President Group, Carrefour's presence in China is almost gone. According to incomplete statistics from the media, over the past 20 years, Carrefour has successively withdrawn from more than 20 countries and regions, including the United States, mainland China, Japan, and other important global markets. After shrinking its presence in China, where are Carrefour's profit points? It will focus its main efforts on European markets such as France, Spain, Italy, and Belgium, as well as South American markets like Brazil and Argentina. According to AMZ123, on April 20, Carrefour released its Q1 2022 financial report, showing revenue of 20.239 billion euros, a year-on-year increase of 9%, mainly due to steady growth in the Brazilian and Spanish markets. From Uni-President Group's perspective, becoming the sole owner of Carrefour Taiwan makes its grand blueprint increasingly clear. 02 Uni-President Group Expands Its Territory AgainnWith this move, Uni-President Group will continue to consolidate its leading position in retail, while also getting closer to its goal of the second 50-year growth momentum. In December 2021, Uni-President Group announced the launch of its second 50-year growth momentum. Chairman Lo Chih-hsien publicly stated that the group will take "lifestyle brands" as its strategic core, with four main development directions: manufacturing + R&D, trade + distribution, retail + experience, and alliances + mergers and acquisitions, aiming to build an Asian distribution and lifestyle platform. Having been established for over half a century, Uni-President Group is not only the leading food company in Taiwan but also the dominant force in Taiwan's daily consumer life. Lo Chih-hsien has called for "building brands, not just manufacturing," leading Uni-President Group through a major transformation to aggressively enter the lifestyle industry, aiming to get closer to people's daily lives. This transformation is largely driven by the pandemic over the past two years. Lo Chih-hsien said bluntly: "The pandemic has been quite disruptive, even interrupting our pace in building the Asian distribution and lifestyle platform, causing delays in the timeline of related plans. The inconvenience and even lockdowns have also hindered interaction between Uni-President Group and consumers, especially in the retail industry. This has been a considerable damage to us." Therefore, Uni-President Group's goal is to further integrate all online and offline lifestyle-related retail businesses, extending convenience from street corners to homes, and even into consumers' hands, transforming social retail into a lifestyle circle concept. "We must break out of the framework and observe what type of retail consumers actually need." Clearly, acquiring Carrefour Taiwan is a key step in breaking out of this framework. Looking back at Uni-President Group's retail expansion blueprint, in 1978, Uni-President cooperated with the then American Southern Company to open the first "7-Eleven" convenience store in Taiwan, introducing the entire model to Taiwan, stocking various foods favored by young people, and achieving great success. Image source: Internet As of December 2020, the 7-11 store layout was as follows: 136 stores in Shanghai, 46 in Zhejiang, 6,024 in Taiwan, and 2,978 in the Philippines, totaling 9,184 stores. Recently, Uni-President Group announced that it opened the 10,000th 7-Eleven store in Asia in Anping, Tainan, Taiwan. This means that after 44 years of layout, Uni-President Group's 7-11 stores have exceeded 10,000. Now, with the acquisition of Carrefour Taiwan, Uni-President's distribution territory has been further strengthened. After 50 years of establishment, Uni-President Group has developed into a "super battleship" covering food, grain and oil, trade, cosmetics, packaging, logistics, investment, and other businesses. With the identity of having 10,000 7-Eleven stores and being the largest shareholder of Carrefour Taiwan, Uni-President Enterprises and President Chain Store, the two major food entities, have joined forces to become the two huge and solid pillars supporting Uni-President Group. In its first 50 years, Uni-President Group has lived up to expectations, and its solid "foundation" is unshakable. Final Thoughts: The closure, withdrawal, and eventual disappearance of Carrefour from the Chinese market may signify the iteration of a generation of traditional shopping malls, but in my view, it is only iteration, not extinction. So, some ask: Is there really no way out for physical retail? There is! Physical retail still has strong vitality. Offline supermarket stores can naturally radiate to surrounding communities and business districts, meaning offline traffic is cheaper than online. The offline model also offers convenience. Consumers need supermarkets as more humanized consumption places. The fact that convenience stores and community fresh food shops are doing well is an example. Uni-President Group's repurchase of Carrefour Taiwan, owning department stores, supermarkets, hypermarkets, and online e-commerce, forming a "full-channel" retail, is a powerful proof. As Lo Chih-hsien mentioned, transforming social retail into a lifestyle circle concept, observing what type of retail consumers actually need. Let us look forward to what kind of retail format Uni-President Group will bring to consumers. -END-