How Can Large Foreign-Funded Supermarkets Gain a Foothold in China: Take Sam's Club as a Study Case

Hailin Cheng,Yue Xu,Yufei Cheng

doi:10.54691/bcpbm.v16i.302

Abstract

Sam's Club is one of the largest membership-based retailers in the world. In the context of the epidemic, they still have a place in China's retail industry. Moreover, it has won the affirmation of many customers through its unique advantages and innovations. This paper aims to use Sam's Club as the main object of this case study to analyze how it has won in the Chinese retailer industry. SWOT Analysis is preferred to use as the primary method. This paper concludes that the differentiated and high-quality private label allows Sam's Club to win some competitiveness. And in the context of economic growth and the COVID-19, consumers are more inclined to buy a larger quantity of goods for storage at a time, which also reflects the advantages of Sam's Club. On the other hand, Chinese policy will impose some restrictions on Sam's Club. Therefore, Sam's Club in the Chinese market needs to pay more attention to the Chinese government's policies on international supermarkets and actively adjust and innovate policies to enhance competitiveness and increase customer loyalty in line with international conditions.

Highlights

With the development of globalization, entering into foreign countries is an inevitable trend for enterprises to gain more reputation and earn more profits
This paper is based on how the international large-scale warehouse supermarkets in China are gradually decreasing and unsatisfactory, and during this special period of the COVID-19, Wal-Mart's Sam's Club gained a place in China
When a large supermarket intends to enter the Chinese market, it still needs to retain some unique characteristics of its own supermarket while adapting to the local policy and culture

Summary

Introduction

With the development of globalization, entering into foreign countries is an inevitable trend for enterprises to gain more reputation and earn more profits. China is one of the largest and most potential economies that attract them to expand for multinational retail companies. During COVID19, the Chinese market obtains tremendous opportunities with inelastic consumer demands since people tend to store a large volume of goods to guarantee their livelihood. The current performances of multinational retailers like Walmart, Metro, Carrefour, and other famous foreign enterprises in China is not satisfying. In 2019, German retailer Metro sold its business to Wumei to quit the Chinese market due to its dropping revenue [1]. The biggest retail company globally, has had to close nearly 80 Chinese stores from 2016 to 2020 to prevent their general financial loss [2]. The changing consumer demand and fierce competition from e-commerce may account for the failure of foreign companies

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