Shinsegae streamlining China operations amid huge lossesKorea’s second-largest retailer Shinsegae Group is poised to realign its business in China as it fails to win over Chinese shoppers, industry sources said yesterday.
“Despite being one of the earliest foreign retailers in China, Shinsegae continues to lose ground to local firms more attuned to local consumers’ needs,” said a source close to the matter. “It is inevitable that the company must restructure its China business.”
The remarks come amid reports that multinational retail chains like Carrefour and Tesco may be considering trimming their businesses in China. Wal-Mart, the world’s largest retailer, said in October it has adjusted its expansion pace in China, adjusting to the changing macroeconomic climate.
E-Mart, a discount store affiliate of Shinsegae, opened its first Chinese outlet in February 1997 and has been operating 27 stores mostly in the northeastern region of the country.
It has reduced to 16 its number of stores in the last two years due to cumulative losses. Shinsegae now runs nine stores in Shanghai, five in Tianjin, one in Wuxi and one in Kunshan in the eastern part of China.
It estimates its discount stores in China lost 94 billion won ($87 million) in 2011.