International Brands Have Shrunk &Nbsp In The Chinese Market, And Strategic Adjustment Is The Main Reason.

From the beginning of the year, several international

Most of those who exit are retailers.

Analysis of the withdrawal of foreign brands found that they belong to the field of retail shopping, closed stores in Beijing, Shanghai and other first tier cities.

For example, in January, the second largest building materials retailer in the United States closed its stores in the Beijing market; in February, household appliances retailers.

Why is it that the world's top 500 enterprises are so concentrated in China to adopt the "downsizing plan" as a case? Or are there common reasons?

Some people say that although they are all international brands, copying the foreign models will not work in the Chinese market.

Others say that the slow expansion of these international brands in China has led to a decline in profitability and forced shutting down stores. The United Kingdom has even characterized these events as "defeat" by "why so many businesses have lost China".

The main cause or strategic adjustment.

With the continuous expansion of the scope of the discussion, they have also reacted with official statements.

For example, "strategic adjustment", or "contraction front", and "temporary departure, will return."

Obviously, there will be some helplessness. After all, such a huge market in China is very tempting for any big enterprise. Obviously, it does not mean that it can be released.

Tang Sijie, President of best buy Asia, has publicly stated that closing the best buy store in mainland China is a very tough decision. The current shop opening mode is not suitable for the Chinese market. KalPatel

But best buy is not leaving China. This year, the new store will be reopened in a new mode at the appropriate time. Meanwhile, it will speed up the expansion of its wholly owned five star appliance in China.

Acclimatization is also an inducement.

Reporters interviewed experts on these events. They believed that in addition to strategic adjustment, "cultural differences" and "acclimatization" were also unavoidable reasons.

Although China's huge market has attracted foreign investment, it will be "acclimatized" in the Chinese market.

Ceng Xiaohua, Secretary General of the Shenzhen import and Export Chamber of Commerce, believes that they have implanted their successful experience abroad and have not taken into account the particularity of the current market in China.

In addition, these seemingly negative "Guan Dian" and "delisting" actions, in another way, may be a reorientation and a fission for new development opportunities.

At present, home depot and Mei song Paris give up the market of a second tier city such as Beijing and Shanghai. These cities are the most stringent areas in the new deal of the property market, and the volume of real estate pactions is more serious. Therefore, abandoning the Beijing and Shanghai markets may also be the strategy of "foreign brands".

Perhaps it will shift the focus to three or even four line cities and make a comeback after a temporary consolidation.

Still the market has the final say.

"The withdrawal of foreign capital such as best buy and home depot is in fact a normal reaction to the laws of the market. The survival of the fittest will be eliminated."

According to an expert of Shenzhen WTO affairs center, according to the promise of joining WTO, China has released the restrictions of foreign enterprises entering the retail industry in China since 2004. Now, China has joined the WTO for 10 years, and the first time foreign capital enterprises have shrunk in the overall competition of domestic and foreign enterprises.

This shows that the successful foreign business model is not necessarily suitable for the Chinese market. The world type enterprises are successful abroad. In China, it is also necessary to adjust the market situation, rather than copy the foreign model.

Indeed, the reporters observed that some foreign-funded enterprises are very flexible. They will set up sales strategies and products according to the actual situation of the Chinese market and survive well in China.

For example, KFC, the fast food brand of the world's top 500 enterprises, does not invariably defend its model. Instead, it designs and develops some localized products according to the taste of the Chinese people and achieves good results.

Withdrawal of foreign capital and reduction of profit

As a consultant of the national development and Reform Commission, the Shenzhen Special Administrative Region has recently been very concerned about the withdrawal of some foreign brands from the Chinese market.

A few days ago, he said in an interview with reporters, he also went to a lot of foreign-funded enterprises to investigate and understand the actual situation.

Some foreign capital withdrawal may be related to the cancellation of tax preferences.

Since last year, China has abolished preferential tax policies for foreign-funded enterprises. The tax revenue of domestic and foreign enterprises is on the same starting line, and profits of foreign-funded enterprises have been affected.

In addition, in recent years, with the substantial increase of workers' treatment and the increase of labor costs in China, the cost of production of some foreign-funded enterprises has increased, resulting in a decrease in their profits in China.

Guo Shiping believes that in recent years, the government has increased support for domestic enterprises, and domestic enterprises have further narrowed the gap with foreign enterprises through pformation and upgrading, and competition has further intensified, and foreign enterprises generally feel the pressure.

This also forces some foreign-funded enterprises to make strategic adjustments. Withdrawal may be the best choice in the short term.