--- title: "Foreign Retailers Are Returning to China With New Formats" description: "Foreign retailers did not simply retreat from China. They shed declining hypermarket models and returned through warehouse clubs, convenience stores, and consumer-centered formats that continue to influence local retail." author: "New Distribution" publisher: "New Distribution" email: "zhaobo258@gmail.com" telephone: "+8615854817671" published: "2024-07-02" language: "en" canonical: "https://xinjignxiao.com/en/articles/foreign-retailers-return-to-china/" markdown: "https://xinjignxiao.com/en/articles/foreign-retailers-return-to-china.md" original_source: "https://mp.weixin.qq.com/s/VVOJY7WVkCOKp97CXBOZEA" translation: "https://xinjignxiao.com/zh/articles/%E5%A4%96%E8%B5%84%E9%9B%B6%E5%94%AE-%E5%8D%B7%E5%9C%9F%E9%87%8D%E6%9D%A5-4212b2ad.md" attribution: "New Distribution — https://xinjignxiao.com/en/articles/foreign-retailers-return-to-china/" usage_policy: "https://xinjignxiao.com/ai-policy.txt" --- # Foreign Retailers Are Returning to China With New Formats > Foreign retailers did not simply retreat from China. They shed declining hypermarket models and returned through warehouse clubs, convenience stores, and consumer-centered formats that continue to influence local retail. Carrefour, Metro, Auchan, Tesco, and other foreign retail operations were acquired by Chinese companies. It was easy to conclude that international chains had failed in China. The evidence pointed to a more complicated transition. Walmart became the largest company in China's chain-retail ranking. Costco became an operating benchmark. Lawson, 7-Eleven, and FamilyMart influenced a new generation of Chinese convenience chains. Foreign retailers did not disappear. Many left the declining hypermarket model behind and re-entered the competitive landscape through formats better aligned with current consumer demand. The figures below reflect the data available when the original Chinese article was published in July 2024. ## Foreign Chains Shaped China's First Retail Boom China's modern chain-retail sector developed under strong international influence. Carrefour opened its first Chinese hypermarket in Beijing in 1995. Walmart followed with its first China store in Shenzhen in 1996. Metro, Auchan, Tesco, and others entered over the next several years. For a long period, foreign brands occupied roughly half of the leading positions in China's chain-retail rankings. Their hypermarkets became models for early domestic groups. The most influential approach was sometimes described as the Carrefour model: earn less from ordinary merchandise margin and more from supplier fees, display charges, promotions, and other back-end income. Suppliers delivered directly to stores, allowing the retailer to expand with relatively little investment in logistics infrastructure. The model worked when modern retail space was scarce and large chains had exceptional bargaining power. Many Chinese supermarket groups copied it and enjoyed its growth for years. ## Why the Hypermarket Model Receded The pressure became visible around 2010. Market saturation and rising rents weakened store economics. E-commerce, online-to-offline services, and instant retail began replacing trips that once required a hypermarket. Large stores in lower-tier cities and non-core urban districts were especially vulnerable. Walmart acquired Trust-Mart, Auchan was absorbed into the operator of RT-Mart, China Resources Vanguard acquired Tesco's Chinese operation, and several Korean chains closed their stores. Around 2020, another wave of ownership changes followed. Suning acquired 80% of Carrefour China in 2019. Wumart acquired 80% of Metro China in 2020. Alibaba took control of Sun Art Retail, the operator of RT-Mart. The closing of Carrefour's Beijing Chuangyijia store in March 2023 was symbolically important because it had been the chain's first Chinese location. The store that helped begin an era was now marking its end. The decline, however, was a decline of a format—not proof that foreign retail capability had become irrelevant. ## The Rankings Revealed a Different Picture In the chain-retail ranking cited by the article, Walmart replaced Suning at number one. That was the first time in decades that a foreign company led the list. Other international operators remained visible. AEON and Dennis ranked 22nd and 26th. Lawson, 7-Eleven, and FamilyMart ranked 40th, 47th, and 60th. Costco ranked 72nd. Walmart's store count was relatively stable while revenue rose 10%, reflecting the contrast between pressure on ordinary Walmart supermarkets and growth at Sam's Club. Costco moved slowly after opening its first mainland China warehouse in Shanghai in 2019. By the end of 2023, it had only five mainland stores, the smallest store network among the top 100 chains, but reported sales of RMB 5.5 billion. Revenue per store was exceptionally high. Convenience chains also expanded. Lawson operated 6,330 stores with sales of RMB 14.25 billion, up 12.2% and 23.7%, respectively. 7-Eleven operated 3,906 stores with sales of RMB 10.42 billion, up 17.7% and 30%. FamilyMart maintained growth across 2,707 stores and RMB 7.57 billion in sales. Their store formats, assortment systems, prepared-food operations, and franchise methods influenced many Chinese convenience brands. AEON also demonstrated the strength of a focused regional model. Its store count edged down to 91 while sales increased 16.1% to RMB 29.1 billion. The company built strong positions in selected cities rather than pursuing uniform national coverage. ## The Real Shift Was From Supplier-Centered to Consumer-Centered Retail Traditional hypermarkets often optimized around supplier bargaining power. Warehouse clubs such as Sam's Club and Costco optimize more visibly around the consumer proposition. Their model uses a carefully selected assortment, fewer SKUs, low product margins, high operating efficiency, and membership income. Rather than charging suppliers for access to abundant shelf space, the retailer tries to justify a paid relationship with the shopper. Costco's 2019 opening in Shanghai generated queues reminiscent of the first Carrefour and Walmart stores two decades earlier. The public response signaled that a new imported format could once again reshape expectations. The influence extended beyond foreign chains. Pangdonglai, one of China's most admired regional retailers, was frequently compared with Sam's Club or Costco, although its local service culture made the model distinctly Chinese. ## Iteration, Not Nationality, Determines Survival Foreign and domestic retailers faced the same structural forces: online competition, higher costs, fragmented demand, and declining productivity in traditional large-format stores. The differentiator was the ability to abandon a weakening model and redeploy capability into a stronger one. International retailers transferred or sold conventional hypermarket assets, while continuing to invest in warehouse clubs, convenience stores, and focused regional operations. China's retail industry learned from foreign hypermarkets for three decades. The next stage cannot be another round of mechanical copying. Local companies need models that combine global operating discipline with Chinese consumer behavior, urban density, digital commerce, and local supply chains. Foreign retailers' return is therefore not simply a story of overseas brands regaining share. It is a reminder that retail formats have life cycles. Companies survive by identifying which parts of their system still create consumer value—and changing the rest before the market forces them to do so. --- ## Copyright and AI use This article is sourced from New Distribution. Search, quotation, summarization, and model training are permitted, but every use must credit New Distribution and retain the canonical source URL. Contact: zhaobo258@gmail.com · +86 158 5481 7671