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China Briefings

Reports on China issued by Samsung Economic Research Institute

China Business Intelligence No. 209

China Business Intelligence No. 209

Samsung Economic Research Institute Beijing Office

Dec. 14, 2011

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The top four global retailers (Wal-Mart, Tesco, Carrefour and Metro) replaced their senior managers by reason of poor business performance and frequent scandals. Wal-Mart’s restructuring of its senior management came after the pork mislabeling scandal in Chongqing. The competition in China’s retail distribution market is cutthroat, spurred on by the country’s rapid economic growth. The heated competition and revitalization of the retail distribution market has led to a shortage of talent and high staff turnover, thereby dragging down the overall levels of management performance and service quality. Although multinational retailers have done business in China for a decade, they have yet to establish effective localization models. Having reached a conclusion that existing strategies are no longer viable amid fierce competition in the retail distribution market, retailers have started to seek new business models.

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