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Carrefour shuts its doors in India

French retail giant Carrefour is shutting down operations in India and has closed its wholesale stores in the country. I has been in the Indian market since 2010, operating five wholesale stores.

In a statement on its site, Carrefour said the business will come to a halt in September. “Until that time, the company will continue to be fully engaged with all its employees, suppliers, partners and customers to ensure a smooth transition,” it said.

Earlier in May, Times of India had reported that Carrefour was looking for an exit strategy after plans of selling its stores to Sunil Mittal’s Bharti group fell through. Global retailers have in recent times found it difficult to establish their business in India. According to Forbes, U.K. retailer Tesco had to invest $110 million in partnership with the Tata Group to open front-end stores in India.

These developments come on the back of a new government in India which is opposed to foreign investments in retail as it would hurt the small players in the market.

As for Carrefour, India is not the first market it is pulling out from lately. It has shut shops in Columbia, Greece, Malaysia and other places too. In Singapore as well, Carrefour shut its doors in 2012. According to industry players, aside from heavy competition in a rapidly evolving business environment, Carrefour’s passive approach to marketing could have played a key role in killing the brand here.

While other factors such as location and strong competition also contributed to the brand’s undoing, its inactivity in the marketing space is notable at a time where its competitors are working hard to reach different market categories.

Also with the influx of digital, retailers are facing a threat on a daily basis. While in the past, a little differentiation in a brand’s strategy would go a long way, today the diversity in touch points have led brands to scramble to reach their target audiences. Challenges for the brick and mortar retail outlets are many as digital sweeps away the audiences, offering avenues to compare prices, shop and get the purchase delivered to their doorsteps.

(Read: Retail’s next evolution)

Retailers today are often bombarded with questions such as which digital touch-points should connect and inform? Which touch-points should engage the shopper more deeply? Which ones should convince the shopper on the transaction they are about to make?

At a recent retail marketing roundtable conducted by Marketing, Stanley Kee, managing director of GfK said: “Amid all the challenges that digital is posing to retailers, it is important to not lose sight of the core value proposition. Ultimately it is about being relevant to your consumers.”

“At the end of the day, if the business is relevant to consumers, they will visit the stores to buy the products.”

 

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