Blog: Katy AskewCarrefour expands in Chinese e-commerce

Katy Askew | 5 June 2015

News that French retail giant Carrefour last month launched an online shopping portal in China, carrefour.cn, comes as further evidence of the growing importance of e-commerce in the market.

The website sells mostly grocery and household items and delivers to homes in Shanghai.

The company has reportedly indicated that it expects to extend its delivery network. Carrefour plans to build a total of six fulfilment centres by end-2016, with the first to be located in Kunshan, near Shanghai.

The company is also installing tablets at its supermarkets around the country to allow shoppers to browse online, in store. Carrefour operates 238 supermarkets in about 70 Chinese cities.

Carrefour's drive online in China is a reflection of rapidly evolving consumption patterns in the country. China is now the world's largest e-commerce market. Figures from China's Ministry of Commerce reveal that total online sales increased to CNY1.85trn (US$296.96bn) in 2013. According to the government report, the number of Chinese consumers shopping online rose from 242m in 2012 to 302m in 2013, a 24.7% increase. During the year, online sales accounted for 7.9% of consumer goods spending, up 1.6% on the prior year.

Packaged food manufacturers and retailers alike must respond to this new channel growth. As we detailed in our Management Briefing looking at emerging market e-commerce, published at the start of the year, e-commerce requires distinct strategies that differentiate it from traditional channels.

And, as has been demonstrated in the case of infant formula, companies that fall behind the curve risk losing share in a highly competitive market. We recently flagged in our insight pages that the likes of Danone, Mead Johnson and Nestle are all scrambling to step up the presence of their infant formula businesses online.

Online sales have been highly disruptive for the infant formula category in China. The question now is what other sectors will be redefined by e-commerce and are you ready?

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