China began to open its closed market after joining the WTO. The Chinese government had gradually eased entry barriers for offshore companies until it became entirely open by the end of 2006. In the meantime, the Chinese government adjusted its investment management policies, especially those on for...
China began to open its closed market after joining the WTO. The Chinese government had gradually eased entry barriers for offshore companies until it became entirely open by the end of 2006. In the meantime, the Chinese government adjusted its investment management policies, especially those on foreign tax benefits. Accordingly, multinational corporations entered the Chinese market. Among them, a large-discount mart is the most fiercely competitive industry. In 1997, the Korea discount store, E-Mart, entered the Chinese market by opening its first store in Shanghai, China. E-Mart opened a total of 20 stores with sales reaching about 350 billion won. However, the net loss was recorded 61.3 billion won in 2012, and only 15 E-Mart stores managed to stay in business by 2014. This leads to a question why E-Mart, which is the leading distributor is Korea, is staggering in China. The purpose of this paper is to investigate some factors involved in the E-Mart’s downward trend in the Chinese market. This paper is composed of six chapters. In the first chapter, it outlines the structure and method of the research along with illustrating its background and purpose. The following chapter describes the theoretical background of retailers and their localization strategies. In Chapter 3, it not only shows the development processes and the current situation of the Chinese distribution market, and but also organizes the characteristics and changes in the consumer market of China. The fourth chapter describes reasons for E-Mart’s entering the Chinese market and the current state. In Chapter 5, with a view to the Chinese market strategies and localization strategies drawn by Korean E-Mart, French Carrefour, and US Wal-Mart, it compares and analyzes factors involved in E-Mart’s slump based on the localization theory. The concluding chapter 6 summarizes causes of the slump of E-Mart in China. Korea and China have shared a long history, allowing both to have much in common in their cultures. However, there appears to be more differences between their corporate and consumer cultures than similarities. E-Mart needs to recognize differences in depth in order to adapt to the Chinese consumer market. This paper can be used as a basis for enhancing localization strategies and securing competitiveness for large retailers in preparation for expanding into the Chinese market.
China began to open its closed market after joining the WTO. The Chinese government had gradually eased entry barriers for offshore companies until it became entirely open by the end of 2006. In the meantime, the Chinese government adjusted its investment management policies, especially those on foreign tax benefits. Accordingly, multinational corporations entered the Chinese market. Among them, a large-discount mart is the most fiercely competitive industry. In 1997, the Korea discount store, E-Mart, entered the Chinese market by opening its first store in Shanghai, China. E-Mart opened a total of 20 stores with sales reaching about 350 billion won. However, the net loss was recorded 61.3 billion won in 2012, and only 15 E-Mart stores managed to stay in business by 2014. This leads to a question why E-Mart, which is the leading distributor is Korea, is staggering in China. The purpose of this paper is to investigate some factors involved in the E-Mart’s downward trend in the Chinese market. This paper is composed of six chapters. In the first chapter, it outlines the structure and method of the research along with illustrating its background and purpose. The following chapter describes the theoretical background of retailers and their localization strategies. In Chapter 3, it not only shows the development processes and the current situation of the Chinese distribution market, and but also organizes the characteristics and changes in the consumer market of China. The fourth chapter describes reasons for E-Mart’s entering the Chinese market and the current state. In Chapter 5, with a view to the Chinese market strategies and localization strategies drawn by Korean E-Mart, French Carrefour, and US Wal-Mart, it compares and analyzes factors involved in E-Mart’s slump based on the localization theory. The concluding chapter 6 summarizes causes of the slump of E-Mart in China. Korea and China have shared a long history, allowing both to have much in common in their cultures. However, there appears to be more differences between their corporate and consumer cultures than similarities. E-Mart needs to recognize differences in depth in order to adapt to the Chinese consumer market. This paper can be used as a basis for enhancing localization strategies and securing competitiveness for large retailers in preparation for expanding into the Chinese market.
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