For Carrefour China, the most extensive reform in its 20 years in China continues to be accompanied by store closures, poor performance, and a downturn in the overall market. No one can yet say when Carrefour's efforts will translate into a resurgence.

Store Closures Once again, the rumored store closures have become reality. Carrefour's Hefei Hengfeng store is now locked up. A notice of closure with white background and blue text is prominently posted on the building's wall and the glass at the entrance: "Carrefour Hefei Hengfeng store will cease operations from September 2."

Carrefour store closure Nearby shops are also affected. Those that have ceased operations, such as KFC, are also closed, with notices directing consumers to other restaurants. Those still operating, especially non-street-facing shops, have had to put up posters at the building entrance to inform customers they are open and how to "detour" to enter.

The reporter randomly interviewed several nearby consumers, and few were surprised by the closure. According to one consumer, as early as January and February this year, the store frequently experienced stockouts and delayed replenishment. "At that time, everyone knew it couldn't hold on."

By March, a local Hefei media outlet reported on the matter, suggesting that Carrefour Hengfeng store might be pulling out. However, the media quoted a person in charge of Carrefour's Hefei public relations department as saying that stockouts during the Chinese New Year were normal, and denied the news that the store would be closing.

However, six months later, the Carrefour Hengfeng store ultimately could not escape the fate of closure.

In fact, this is not the first time this year. In Jiaxing, Zhejiang, a Carrefour store has seen the same scenario.

In March this year, Carrefour's Jiaxing Zhongshan East Road store experienced shortages of some goods, and rumors of imminent closure were rife. The official response at the time was that "the shelves are being renovated and goods are being cleared and adjusted," but on May 8, the store announced it would cease operations.

It is worth noting that two months before this store closed, Carrefour's Yuhang Nanyuan store had already ceased operations; and just a few days after this store closed, Carrefour's Dongguan Shilong store also officially shut its doors. For a time, Carrefour's store closures in China were frequent.

In fact, Carrefour's downturn in China has long been an open secret. In 2014, Carrefour's market share in China ranked only fourth, behind Gaoxin Retail, Walmart, and China Resources Vanguard.

Carrefour's sales performance by global region: significant growth in Latin American countries, a slight decline in its home market France, and a notable decline in Asian countries. Among them, the China region declined by 6.4%.

"Carrefour has clearly shown a decline in the Chinese market. Carrefour does not lack experience, but it has overlooked the fact that China's business model is changing, and consumer behavior is changing, from the original one-stop bargain shopping to a model that emphasizes shopping experience and word-of-mouth influence. So, when consumers cannot easily find items at Carrefour or cannot shop happily, abandoning it is bound to happen sooner or later."

Lin Yue, chief consultant at Lingyan Management Consulting, told the reporter that for Carrefour at present, "living on past glory" is no longer viable.

Revitalization

Revitalization is urgent.

To be fair, since the beginning of this year, Carrefour China has shown "sincerity."

Since the beginning of this year, Carrefour has launched its largest transformation in 20 years in China. Specific adjustments include reshaping the logistics and distribution system, continuing to develop hypermarket formats in third- and fourth-tier cities, piloting the convenience store format "Easy Carrefour," and launching an online mall.

In reshaping the logistics and distribution system, Carrefour China has reorganized its original 24-city commodity procurement centers into 6 procurement centers, each corresponding to a major region, and established a logistics distribution center in each region.

Among them, the distribution centers for the East China and West China regions were completed in June last year and April this year, respectively; the two distribution centers in Wuhan and Beijing/Tianjin will complete investment and construction this year; next year, the logistics distribution centers for the Northeast and South China regions will also be completed smoothly. By the end of 2016, Carrefour will have built 6 modern distribution centers in mainland China.

In terms of convenience store layout, following the low-key opening of its first convenience store in the Chinese market in October last year, in June this year, Carrefour's second convenience store in China officially opened. According to the plan, Carrefour will continue to expand convenience stores in major cities across the country in the future, and more small but refined stores will be incorporated into Carrefour China's retail system.

In addition, with the operation of Carrefour's online mall, Carrefour has also officially launched its O2O business.

Carrefour's O2O model is "order online + delivery from hypermarket + pickup at convenience store" , meaning that after a consumer places an order on Carrefour's online mall, the goods will be shipped from the store closest to the consumer, ensuring delivery within 24 hours.

In addition, consumers can also choose to pick up their purchases at Easy Carrefour convenience stores. However, a problem that cannot be ignored is that Carrefour's "sincerity" is still limited.

In Lin Yue's view, Carrefour's transformation pace seems too slow and limited: "First, the online mall was only launched this year, and the O2O business only covers Shanghai. For a chain giant with more than 230 hypermarkets in 70 cities, this is too slow; second, in the Internet era, channels should be small and refined, and convenience stores have become a very important terminal in the O2O model of e-commerce, but unfortunately, Carrefour currently has only 2 convenience stores. "

Lin Yue further emphasized that in the Internet era, speed determines everything. If Carrefour China cannot quickly make progress in accelerating decision-making, vigorously promoting e-commerce brands, and actively developing new offline channels, it may continue to decline. "In this new era that values speed, the 'elephant' has a difficult time turning around."

Clearly, Carrefour still needs time and patience, and of course, it needs firm, sustained, and effective reform.

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