UK multinational retailer Tesco is closing down its 15 year old store in the Changning district of Shanghai, China.
This is the sixth store that the retail giant has closed in China since last year.
Industry experts believe that Tesco, alongside other foreign retailers, are finding local retailers such as Sun Art Retail Group and China Resources Enterprise tough competition and struggling to tempt consumers away from these recognised outlets.
US retailer Walmart closed three of its Chinese stores in April this year and has not discounted potentially shutting more in the future.
“Because of the relatively small number of outlets they have, especially in the third- and fourth-tier cities, large foreign retailers are not flexible and cost-effective enough in fields such as transporting and promoting their products,” Hong Tang, trade and economics professor at Beijing Technology and Business University, told Inside Retail Asia.
Tao believes that foreign retailers are struggling to attain consumer approval given their failure to provide customised services and products.
Grocery outlets are also struggling with the steady rise of online shopping.
“China’s young consumers are turning to online stores such as taobao.com and jd.com for the convenience and affordable prices,” Wang Xianqing, an expert on circulation economics at Guangdong University of Business Studies, told Inside Retail Asia.
No comments yet