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　　 　　The frequent exposure of the prod- uct quality does not stop Carrefour from earning an amazing amount of profits in China. Meanwhile, Carrefour defeats Wal-Mart in the annual sales amount even though it has a smaller number of supermarkets than its U.S. counterpart (203 versus 271). The sales amount per unit of Carrefour is 60 million yuan more than Wal-Mart.
　　This information comes from the latest“Top 10 Chain Retailers in China in 2011” issued by the China Chain Store & Franchise As- sociation. According to the list, RT-Mart from Taiwan is still the champion in sales amount among all pure shopping mall operators in China. RT-Mart is closely followed by Carrefour and Wal-Mart.
　　For the Chinese retailers, they should put the scandals of Carrefour and Wal-Mart aside and learn from their experiences of success in China.
　　 The Irreproducible RT-Mart
　　RT-Mart has gone public with Auchan. But it is still ranked at the No. 1 position in sales amount in China without the assistance of Auchan. This is the third straight year RT-Mart took this place.
　　According to the list, RT-Mart had 185 supermarkets in mainland China last year which contributed the sales amount of 61.5 billion yuan. The sales amount per unit was 330 million yuan. Carrefour had 203 supermarkets with the sales of 45.1 billion yuan, i.e. the sales amount per unit was 220 million yuan. Wal-Mart had 271 supermarkets and its sales amounted reached 43 billion yuan with the perunit sales amount reaching 159 million yuan. It is worthwhile to mention that the Trust-Mart, which Wal-Mart acquired last year, was not put into consideration.
　　From this we can see that RT-Mart’s sales amount last year was 16.4 billion yuan higher than the Carrefour and its per-unit sales amount was 100 million yuan than its French peer as RT-Mart has 18 fewer supermarkets than Carrefour.
　　“It is hard to reproduce the success of RTMart. The first thing is related with choosing location for expansion. Different from many competitors which take land regardless, RTMart follows the principle of choosing location carefully without any waste of the investment in that field. If the review report says that this area is not suitable for establishing a supermarket, it will not do it. In comparison, many of its counterparts are willing to take land slot despite the loss. This will result in several years’losses of their new stores. With a carefully chosen location, RT-Mart’s supermarkets have a stable profitability. However, when given a land slot with great potential, RT-Mart is willing to invest a lot of money into it,” an insider from RT-Mart said. Once upon a time, RT-Mart contended for a commercial project with Carrefour and defeated the French company with a high price.
　　The second thing comes to the irreproducible supplier management.
　　“The relationship between retailers and suppliers is not in bad situation for long. The core of the bad relationship lies in the chaotic charges and slow payment settlement. RT-Mart has no excessive items for charging and we are quick in finishing the payment. The payment settlement usually lasts 3 months in the retail business, but actually many suppliers cannot get their money within half a year. In comparison, we cleared our payment in less than three months and for some popular products, we pay the suppliers immediately after their delivering their products to us. We do this to reassure our suppliers, which proved to be good for our business as well,” the same insider said. According to him, purchasers from RT-Mart once carried a bag of cash to buy rice which happened to be in short supply. With this method, RTMart is given the result of selling commodities at a low price but earning great sales amount.
　　“We have been working with different retailers and we find that RT-Mart is the quickest one in finishing payment and every day its workers give us the clear sales data, which improves its business transparency,” a supplier of fresh products said. It is known that other retailers are not willing to learn from RT-Mart even though they know the advantages of this pattern because finishing the payment as quickly as possible is indeed beyond their style and ability.
　　 Disparity between Carrefour and Wal-Mart
　　RT-Mart’s specificity is known to the public. But Carrefour and Wal-Mart seem to share the same business pattern but why their performances are so distinguished from each other?
　　When asked about this question, Wal-Mart answered: “As a listed company, we are not convenient to publish the financial data of our regional markets. Nor can we comment on any figures reported in the market.” Carrefour also made the same report.
　　It is known that the disparity in business performance of Carrefour and Wal-Mart might be attributed to their expansion strategies and pricing systems.
　　“The first difference lies in the pattern of opening supermarkets. Since its entry into China, Wal-Mart has been sticking to the role as a wholly foreign-owned enterprise. This conflicted with the current policy that supermarkets in China must be opened as joint ventures. This deprived Wal-Mart of a lot of opportunities in the first-tier cities of China. It did not enter cities like Shanghai and Guangzhou until several years ago. In comparison, Carrefour was more flexible by actively setting up joint-venture supermarkets and taking the advantageous position in major cities of China. It is certain that the location is an important factor to influence the per-unit sales amount. As we discovered, a shopping mall in a good place can earn 700 thousand yuan every day while a shopping mall without a good location can only have 100-200 thousand yuan of sales amount every day, lower than the 300-thousand-yuan standard for profits,” said Li Minghua who worked in Wal-Mart for several years.
　　Having lost the opportunities in the major cities of China, Wal-Mart began to extend its arms to the third- and fourth-tier cities. Li Minghua said that Wal-Mart expanded at a fast pace in the third- and fourth-tier cities to catch up with its competitors. It once even generated the plan of “having stores in every town and every village”. However, the residents in these remote areas have much weaker consumption power compared with the ones in major cities. That’s why Wal-Mart lost to Carrefour in sales amount.
　　A visit to a Wal-Mart supermarket in Loudi, Hunan shows that the commodities in this supermarket are greatly different from big cities. Many brands are from this city and are priced at a low level. This matches local economic condition but the single store’s performance is far behind the ones in developed areas.
　　
　　 What’s worsening the financial data of WalMart is the cost of fast expansion. According to the public data, Wal-Mart could open 40 supermarkets every year in recent years, while Carrefour kept this number at around 20. The investment into a supermarket amounts to tens of million yuan. Therefore, the overspeed expansion brings great stress of cost. And it takes a while for a new supermarket to see profits but if it cannot generate profits within 3 years, it will become a burden for the company.
　　There is also a hidden reason which can only be experienced by internal managers.
　　Ding Liguo, founder of Topretailing.com, was among the first senior executives of Carrefour in China. He was not surprised to see that Carrefour overwhelms Wal-Mart in sales amount. “When you enter Wal-Mart, you will find that the banner of “Everyday Low Price”everywhere. In comparison, Carrefour holds sales promotion campaigns with posters hung frequently” he said. “This actually reflected the difference of the two companies’ pricing sys- tems. Wal-Mart’s “everyday low price” strategy kills the chance of holding sales promotion campaigns which Carrefour can hold anytime and anywhere.”
　　In Ding Liguo’s opinion, Chinese consumers prefer Carrefour’s style for the sales promotion campaigns can greatly boost the consumption. In comparison, “everyday low price”strategy has fewer simulating points and cannot improve the company’s awareness as much as the sales promotion campaigns do.
　　“But of course, the bigger sales amount does not necessarily mean the higher net profits. Cost must be considered. Wal-Mart is not a fool which fails to see the advantages of sales promotions campaigns. Its “everyday low price”enables it to control the volume of purchasing and price more easily and deprives it of the cost of advertisements and posters. This is an advantage Carrefour does not have,” Ding Liguo said.

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