Racheal Lee
Nov 1, 2012

Carrefour's exit due to lack of clear positioning: industry expert

SINGAPORE - Failing to set a clear positioning in the market has caused French supermarket Carrefour to lose its competitiveness and hinder its growth in Southeast Asia, an industry expert said.

Carrefour makes fresh exit
Carrefour makes fresh exit

Carrefour, the world's second-biggest retailer, launched the sale of units in Malaysia, Singapore and Thailand two years ago. The supermarket operator has since sold its network of 42 stores in Thailand to local supermarket brand Big C for US$1.08 billion.

Several months ago, Carrefour announced that it will close down its two outlets in Singapore by the end of this year, as “expansion and growth perspectives do not allow reaching a leadership position in the medium and long term”. Carrefour opened its first store in Singapore in 1997.

Recently, it sold its operations in Malaysia for US$324 million to Japanese supermarket operator Aeon. Carrefour is the fourth-largest retailer in the country, with 26 hypermarkets. UM Malaysia recently retained its media business with Carrefour Malaysia.

A media veteran said Carrefour's positioning is trapped between competitors targeting affluent audiences and the mass market.

“For example, in Malaysia, you have premium supermarkets such as Cold Storage and Jones the Grocer targeting the affluent audience, and bigger supermarkets like Giant and Tesco that play on price and variety,” he said. “Carrefour lost its position and also, its locations are at some suburban areas which are not appealing.”

In Thailand, he noted that there are a couple of big local players in the same category. “They [the local players] have very localised offerings and buyers’ strategy, and make things more affordable to the audiences,” he added.

Prior to the asset disposal news in 2010, Carrefour exited Japan and Korea to focus on bigger and fast-growing markets such as India. Like many other retailers in Europe and the United States, it has been struggling due to challenging economic conditions.

Carrefour also recently agreed to sell its stores in Colombia to Chilean retail company Cencosud. While the company has said that it will continue to stay in Brazil and China, analysts expect it to dispose of its operations in Indonesia, Turkey, Romania and Taiwan as well.

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