Two global retail giants, Wal-Mart Stores Inc and Carrefour SA, have lost market share in China even as the domestic fast moving consumer goods market continued to grow, according to an industrial report yesterday.
Driven by consumption growth and price inflation, China's FMCG market posted a 16 percent increase to 726 billion yuan (US$110 billion) in 2010, market research firm CTR said in a report.
Wal-Mart, the world's largest retailer, saw its market share eroded from 8.2 percent in the second quarter to 7.5 percent in the fourth quarter in China last year. But it remains the largest hypermarket operator in China with a share of 8 percent for the last three quarters, followed by China's CR Vanguard Group with 6.6 percent.
Carrefour, ranked fourth in the top 10 list with a 5.1 percent share for the last three quarters, saw its share fall from 5.1 percent in the third quarter to 5 percent in the fourth quarter, the report showed.
Overseas retailers now face rising competition from domestic rivals which gained rapidly by leveraging advantages on sourcing and distribution.
CTR attributed Wal-Mart's drop to challenges in integrating Trust-Mart, a Taiwan-based chain that's 35 percent owned by the United States retail giant. Trust-Mart saw its share drop from 3 percent in the third quarter to 2.2 percent in the fourth.
"The slower-than-expected consolidation caused Trust Mart to lose customer traffic," said Jason Yu, general manager of Kantar Worldpanel China, a division of CTR.
The image of Carrefour and Wal-Mart also took a beating after they were found guilty of using fake discounts and price tags in their stores. Two Carrefour outlets in Changchun in Jilin Province and Shaoxing in Zhejiang Province were reportedly shut down and the company closed several under-performing stores in some cities.
The report also said local and multinational retailers have begun to focus on expanding aggressively in lower-tier cities.
