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As Carrefour looks to evolve its hypermarket offer globally we round up the initiatives it is rolling out in China, France and Belgium to make the format more efficient and profitable.

Carrefour France opens first ‘Essentiel’ hypermarket

After setting out its plans to launch different trials for its hypermarkets, Carrefour France has opened its first low-cost-focused ‘Essentiel’ store in Avignon. The store puts a greater focus on price, shrunk its sales area, reduced the number of SKUs it carries, especially in non-food, by between 15% and 30%, and has cut back on the way it presents products to shoppers. This has seen the store use metal shelving to display products for many categories, except for organic, which Carrefour has retained in its more traditional look and feel.

Carrefour China announces Gome tie-up

Following a successful trial at 11 Carrefour hypermarkets across four cities in China, Carrefour has signed an agreement with electronics retailer Gome. Carrefour and Gome said the trial had led to ‘double-digit growth in like-for-like store sales’.

The tie-up will see the latter open 200 shop-in-shops in Carrefour’s hypermarkets by the end of July 2019. The retailers said Gome will take between 300 sq. m and 500 sq. m in Carrefour’s hypermarkets, where it will stock home appliances, smart devices and other consumer electronic products. Under the agreement, Carrefour will manage the product promotion and marketing of the ranges, while Gome will supply knowledge on appliances and consumer electronics, logistics and customer services.

Carrefour Belgium and Medi-Market enter into a partnership

Carrefour Belgium has signed a long-term agreement with Medi-Market that will see the latter provide health and wellness products in the former’s hypermarkets. Depending on the Carrefour store Medi-Market will flex what is added, but Carrefour’s ranges will be supplemented where demand for Medi-Market’s products is already high and Carrefour has available space.

Carrefour and Medi-Market said the roll out would occur in phases. In the initial plan shop-in-shops with health and wellness products will be opened, while later Medi-Market will aim to open pharmacies.

Carrefour France to expand number of 24-hour stores

Following the successful trial of a convenience store opened 24 hours a day, Carrefour is looking to extend the offer to more locations. The trial at a Carrefour City in the 7th arrondissement of Paris builds on the positive response to the service in Belgium and Italy, where it has already been made available.

Carrefour Proximity’s executive director, Alexandre de Palmas, has said the retailer ‘would like to eventually have 24-hour stores in Paris and major cities, and be recognised for this service’. To support this aim the retailer is aiming to open 220 convenience stores by 2022 to grow its presence closer to shoppers.

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As an important move to capitalise on China’s massive tourism market and offer Chinese travellers a holistic travel experience, Alibaba is launching a new shopping platform called Fliggy Buy.

An innovative new service

The service allows Chinese travellers to choose from a range of products, including cosmetics, suitcases, bags and alcohol, prior to their international travel. They can then select a pick-up store, input their personal information and make the payment. After arriving at the destination, shoppers can pick up the goods at their leisure.

Information about the products and reviews are in Chinese. Shoppers have the opportunity to understand product features and compare prices across different channels before making the purchase.

In recent years, the focus of Chinese tourists are shifting away from shopping to local experience. The new service allows them more time to explore and experience the destination.

Why it is an important initiative

With US$115bn spent on international trips in 2017, 140mn oversea trips took last year and average spend up by +9% year-on-year in 2018, the new service offers brands and retailers an opportunity to capitalise on this massive market.

At current initial stage, duty-free and tax-free stores are the focus. Alibaba has plans to recruit more overseas merchants to including high-end luxury brands, household electronics retailers, pharmacy and cosmetics stores to enrich product offering.

As shoppers become more selective, targeted marketing becomes more important. Just as Roman Zhu, head of Fliggy Buy, said that:” The launch of Fliggy Buy represents our latest move to work with merchants targeting the vast number of tourists from China to develop innovative solutions and offer them targeted customer traffic. Our aim is also to embrace the potential of digital technology and provide a holistic travel experience encompassing food, accommodation, transportation, sightseeing, shopping and entertainment.”

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Alibaba has outlined two initiatives to bring US$200bn worth of international products into China over the next five years.

Offering new opportunities for suppliers from around the world

One of Alibaba's core missions is to make it easy to do business anywhere. In China, it looks to help different businesses enter the market and trade successfully. One route to market for suppliers is Tmall Global, a cross-border online platform. Alibaba has announced two solutions offered by Tmall Global to support international brands maximise opportunities for strong demand for quality products: Centralised Import Procurement (CIP) and Tmall Overseas Fulfilment (TOF).

Access to nearly 700m users on Alibaba platforms

The CIP program uses six centres Alibaba has set up across the world, sourcing imported goods for all the online and offline stores within Alibaba's economy, including Freshippo, Tmall and Intime Department Store. The program provides international brands access to a strong user base.

TOF allows brands to place a small order of products at one of the TOF centres to be sold on Tmall Global. This gives businesses to test, learn and optimise their assortment before investing further in China. TOF centres are currently available in Japan, South Korea and the U.S. Key to supporting fulfilment is Alibaba’s smart logistics network Cainiao, which will continue to expand its warehouses in China. It aims to triple its total size to 3m sq m in three years.

Wrapping customers and brands into the economy

Alibaba has a deep understanding of its shoppers. Its wide economy means that customers can access grocery, lifestyle and other amenities through different subsidiaries. Brands and suppliers working with just one division e.g. Tmall Global, have the option to integrate further by getting involved elsewhere in the economy. Alibaba's economy is also flexible, allowing different parts of the business to bolt onto the retailer's other channels. Tmall Global for example, can help brands drive awareness by tapping into Taobao Livestream.

Want to know more?

Subscribers can read more on Alibaba's Strategic Outlook here.


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