Foreign retailers in post-WTO China: stories of success and setbacks

Abstract

This study revisits the foreign retailers in the post-WTO China with two objectives: (1) to analyze the market penetration and performance of the major foreign retailers; and (2) to examine their varying corporate strategies. Market penetration of the foreign retailers has taken place in two directions simultaneously: from the eastern coastal region to the western interior, and from large urban centers to second- and third-tier cities. None of the foreign retailers in China has passed through the complete model described by Dawson (2003) and their levels of market penetration and performance vary greatly. Clearly, the Western retailers, which possess the most resources and advanced information technologies and do business in new retail formats, are taking the lead in penetrating the Chinese market. The Southeast Asian retailers have also expanded with impressive results, but their staying power is unclear. Although the Japanese retailers received the least negative publicity, they have made the least inroad in penetrating the Chinese market.