CAIXIN MEDIA (China), REUTERS

Worldcrunch

BEIJING - It wasn’t so long ago that its booming spending power and growth potential were calling all the world's retail giants to set up shop in China. But according to Caixin media, a relative economic slowdown and the rapid rise of its e-commerce is prompting many of those foreign retail giants to slowly shutter their Chinese outlets.

Media Markt, a German consumer electronics chain, announced at the end of February it was shutting all its stores in China. Walmart also decided earlier this month to close three of its mega outlets.  

As Caixin media reports, Best Buy, an American consumer electronics and appliances chain, was the first to pull back from China, closing all its nine stores in 2011. This year just before the Chinese New Year in early February the world's third-largest home improvement retailer B & Q China announced it was shutting its store in Wuhan after having shut 24 other operations in China since 2009. Meanwhile two other foreign retail outlets, Ito Yokado, a Japanese chainstore, and Our Lotus, a branch of a Thai group, simultaneously announced the closure of their stores in Beijing earlier this year.

Walmart in China (lehaneb)

But it is not just foreign retail companies suffering from the setback. Lots of Chinese retailers have encountered the same operational hardship. In its annual report released this week, Li Ning, a local Chinese sports brand, revealed it has closed 1,800 shops across the country in the past year.

The tide of closed-down outlets reflects the increasingly tough conditions for traditional retailers, Caixin media notes. The double whammy of the slowdown of the Chinese economy and the fierce rise of e-commerce operators are the main causes. For instance China's largest e-commerce firm, Alibaba, is said to be selling merchandise this year worth more than that sold by Amazon and eBay combined, according to a recent Reuters report. 

Inventory of retailers closing stores (Caixin media)

 

Names of firm

Background

Description

Walmart

American supermarkets

4 stores shut in 2012, plus another 3 in this year including an old one which had been open for 10 years.

Media Markt

German comsumer electronics

In March 2013 it’s to leaveChinatotally.

Home Depot

American retailer of  home equipments

September 2012, after successive years of losses, it announced it’s packing up totally in the Chinese market.

Li Ning

Chinese sport apparels

It closed 1821 shops in 2012.

Peak Sport

Chinese sport apparels

It closed 1323 shops in 2012.

Best Buy

American comsumer electronics

February 2011, it decided to shut 9 of its stores and quit the Chinese market.

B&Q

British multinational DIY

February 2013,  announcement to shut down a store inWuhan, after having shut 24 other operations inChinasince 2009.

Carrefour

French supermarkets

2012, closure of 6 stores inChina.

Avon

American beauty and household care company

2013, it is to reduce its provincial branches inChina.

Our Lotus

Thai-owned retail store

January 2013, closure of itsBeijingstore.

Ito Yokado

Japanese general merchandise store

January 2013, closure of itsBeijingstore.

TESCO

British supermarkets

Since August 2012, closure of several stores in various provinces