M&A Analysis and Research on Supermarket Industry of P.R.C 2007

Abstract:

•  Status quo and background of M&A in China's supermarket industry

A rosy scenario has been pictured following 20 years of reform. With RMB 1 trillion above in 1997 and RMB 4.04 trillion in 2006, China 's supermarket industry has developed a scale to some extend. Nationwide, there are more than 3000 supermarkets sharing 6000 ㎡ of land with 20% of annual growth. Among 9 pilot cities, this spectrum shares one tenth in national percentage. In respect of market share hundreds of big circulation businesses take, supermarket industry stakes out half of the territory. Supermarket in chain model stands at one sixth of market share.

From over-all situation, big ones seem to locate in Shanghai , Beijing and Shenzhen. Among top 100 retail enterprises, there are 59 supermarkets in which 32% in Shanghai and 14% in Beijing which grab 46% of market combined in top 100. That indicates advantages that Shanghai and Beijing supermarket enjoy.

With steadfast growth of domestic consumption, traditional supermarket has gone through sweeping reform to lift out of burden and got improved business marketing performance management. Foreign supermarket will bring in high expectation in brands and booming industry. What should be worth noting is the looming crisis behind seemingly prosperous scenario. As competition intensify, homogeneous portfolios offered by domestic supermarket will be tested against dynamic change in business model, industrial paradigm and marketing savvies.

•  Motives of M&A in supermarket industry

There has been low density haunted current supermarket or no scale at all and if have, far from economical. Weak competitiveness due to absence from collective procurement and distribution forces them into war of price which makes it hard to grow. In addition, primary land has been concerned most by supermarket industry compounded with limited commercial land available and projected skyrocketing price in cosmopolitans, working capital will be up. On the other hand, since cost pressure can not be transferred to consumer due to stable commodity price, those companies who have stand advantage in cost will enjoy more. Strong players in this sector can sharpen the edge through M&A. Foreign company will expand as they further penetrate into China's supermarket industry. What has happened now is that foreign company has accelerate their presence in number of first level cities among others Beijing, Shanghai, Guangzhou and Shenzhen while in second cities and Western regions as well. By contrast, China 's counterparts have been over depending on capital from supplier which triggers crisis in financial chain, dire strait in business performance and bankruptcy.

We envisaged a fiercer competition in this market and M&A jumped on the headlines. Extensive expansion among supermarkets is achieved through M&A and capital tapped which is milestone in this industry.

•  M&A trend in China 's supermarket industry

Competition of domestic supermarket industry will grow fiercer as little profit can be exploited from cross-the-board. As to move corporate performance and market share upward, in spite of stimulating current scale of outlets and profitability, leapfrogging development in number of presents and scale through M&A should be transformed into strategic concern.

A. Foreign take-over. M&A is viewed as major way for capable foreign company to expand under the backdrop of urbanization going on in China and limited commercial network resources. By M&A, foreign company will step into targeted market while obtain good outlets and large chunk of market share. The company will swim in profit by excellent output management.

B. Regional acquisition. Domestic tycoon will gear up their own market share through regional M&A that is expected to be heated up with diversified manners.

C. Policy acquisition. Recommendation of Promoting Circulation Business put out by the State Council delineated a clear vision over cultivating state-owned circulation company. China Development Bank should offer better fiscal term with RMB 50 billion to back up logistics centre build-ups committed by big circulation company along with information and digital network in urban and rural areas, infrastructure extension and reconstruction, engineering reconfiguration and M&A in circulation companies.

D. Stock merger. Primary land has became distinctly shorted coupled with appropriation of RMB, open-endedness of A stock to foreign merger and tidal wave of industrial M&A set by full-circulation usher supermarket industry based on revaluation into resources integration.

Content: 


Chapter 1 Profile on Study
Section 1 Section 1 Background for study
Section 2 Study contents
Section 3 Study methodology
Section 4 Study team
Section 5 Study conclusion


Chapter 2 The Status Quo of Laser Industry Worldwide
Section 1 Supermarket industry in America 
1. Development in general 
2. Character in performance 
3. Development trend 
4. Revenue between 2006 and 2007  
5. Revenue forecast between 2006 and 2010 
Section 2 Supermarket industry in America
1. Development in general
2. Character in performance
3. Development trend
4. Revenue between 2006 and 2007
5. Revenue forecast between 2006 and 2010
Section 3 Supermarket industry in Southeast Asia
1. Development in general
2. Character in performance
3. Development trend
4. Revenue between 2006 and 2007
5. Revenue forecast between 2006 and 2010

Section 4 Supermarket industry in EU
1. Development in general
2. Character in performance
3. 3. Development trend
4. Revenue between 2006 and 2007
5. Revenue forecast between 2006 and 2010


Chapter 3 Market Status Quo and Development Trend in China 
Section 1 Status quo in China’s Supermarket industry 
1. Business model 
2. Market demand 
3. Scale and marketing performance
4. Market competition and environment 
Section 2 Development trend in China’s Supermarket industry
1. Competition in exceptional virtue, thematic portfolio and blockbuster 
2. Revamped for industrialized and intensive chain model
3. Developed through image-building campaign, credit recording and knowledge-based approach
Section 3 Correlation between demand and supply 
1. General development between 2006 and 2007 
2. Demand scale between 2006 and 2007 
3. Forecast of demand and supply between 2007 and 2010 


Chapter 4 Investment Policy Environment in China’s Supermarket Industry 
Section 1 Impact of macro-economy and industrial policy upon China’s supermarket sector
Section 2 Impact of WTO on China’s Supermarket Industry


Chapter 5 Factor Exerting Influence on China’s Supermarket Development 
Section 1 Lack of spending spotlight 
Section 2 Sliding profitability 
Section 3 Backwardness in business philosophy, managerial mode and savvies 
Section 4 Brand new business model vying for market share  
Section 5 Intensified competition among international gurus

Chapter 6 Forecast on Regional Development and M&A in China’s Supermarket Industry 
Section 1 North region 
1. Demand and supply scale between 2007 and 2010 
2. Regional development and industrial pattern 
3. Regional competition and major player 
4. M&A trend and feasibility in regional supermarket industry 
Section 2 Eastern region 
1. Demand and supply scale between 2007 and 2010 
2. Regional development and industrial pattern 
3. Regional competition and major player 
4. M&A trend and feasibility in regional supermarket industry
Section 3 South China 
1. Demand and supply scale between 2007 and 2010 
2. Regional development and industrial pattern 
3. Regional competition and major player 
4. M&A trend and feasibility in regional supermarket industry
Section 4 Central region 
1. Demand and supply scale between 2007 and 2010 
2. Regional development and industrial pattern 
3. Regional competition and major player 
4. M&A trend and feasibility in regional supermarket industry
Section 5 Northwest region 
1. Demand and supply scale between 2007 and 2010 
2. Regional development and industrial pattern 
3. Regional competition and major player 
4. M&A trend and feasibility in regional supermarket industry
Section 6 Southwest region 
1. Demand and supply scale between 2007 and 2010 
2. Regional development and industrial pattern 
3. Regional competition and major player 
4. M&A trend and feasibility in regional supermarket industry
Section 7 Northeast region 
1. Demand and supply scale between 2007 and 2010 
2. Regional development and industrial pattern 
3. Regional competition and major player 
4. M&A trend and feasibility in regional supermarket industry

Chapter 7 The Status Quo of China’s Supermarket Industry 
Section 1 Background of M&A in China’s supermarket industry 
Section 2 Status quo of M&A in China’s supermarket industry
Section 3 Case study of M&A in in China’s supermarket industry
Section 4 M&A trend analysis of in China’s supermarket industry

Chapter 8 Stumbling Stone on M&A in China’s Supermarket Industry
Section 1 Capital 
Section 2 Human resources 
Section 3 Corporate management 
Section 4 Operation risk

Chapter 9 Case Study in Supermarket Industry Overseas 
Section 1  Galeries Lafayette purchased Marks and Spencer (France) 
1. Motives and value of M&A
2. M&A procedure
3. Solution and lesson of M&A 
4. Strategic integration 
Section 2  Metro AG purchased 85 outlets of Wal-Mart in Germany 
1. Motives and value of M&A
2. M&A procedure
3. Solution and lesson of M&A 
4. Strategic integration
Section 3 La Rinascente purchased le Printemps
1. Motives and value of M&A
2. M&A procedure
3. Solution and lesson of M&A 
4. Strategic integration
Section 4 Federated Department Stores, Inc. purchased America Broadway Department Stores
1. Motives and value of M&A
2. M&A procedure
3. Solution and lesson of M&A 
4. Strategic integration

Chapter 10 M&A Taken by Foreign Supermarket Companies over China’s Counterparts 
Section 1 the Development of foreign supermarket firms in China
1. Investment character 
2. Targeted region for investment 
3. Marketing performance 
4. Investment structure  
5. Investment trend 
Section 2 Wal-Mart Stores
1. Investment 
2. Core competitiveness 
3. M&A trend and feasibility 
Section 3 Carrefour Stores 
1. Investment 
2. Core competitiveness 
3. M&A trend and feasibility
Section 4 MAKRO
1. Investment 
2. Core competitiveness 
3. M&A trend and feasibility
Section 5 Metro AG
1. Investment 
2. Core competitiveness 
3. M&A trend and feasibility
Section 6 Pacific, Japan 
1. Investment 
2. Core competitiveness 
3. M&A trend and feasibility
Section 7 Hisamitsu, Japan 
1. Investment 
2. Core competitiveness 
3. M&A trend and feasibility
Section 8 Korean New World Department Store
1. Investment 
2. Core competitiveness 
3. M&A trend and feasibility
Section 9 Parkson Retail Group, Malaysia
1. Investment 
2. Core competitiveness 
3. M&A trend and feasibility

Chapter 11 Foreign Department Store Waiting for Entrance into China’s Market 
Section 1 Sears
1. Business performance 
2. Core competitiveness 
3. Background and motives for entrance 
4. Investment trend and feasibility in China 
Section 2 Huddson＆Bay
1. Business performance 
2. Core competitiveness 
3. Background and motives for entrance 
4. Investment trend and feasibility in China
Section 3 Lafayette
1. Business performance 
2. Core competitiveness 
3. Background and motives for entrance 
4. Investment trend and feasibility in China
Section 4 Selfridges
1. Business performance 
2. Core competitiveness 
3. Background and motives for entrance 
4. Investment trend and feasibility in China
Section 5 AEON, Japan 
1. Business performance 
2. Core competitiveness 
3. Background and motives for entrance 
4. Investment trend and feasibility in China

Chapter 12 Case Study of M&A in China’s Supermarket Industry 
Section 1 Integration between Shanghai No.1 Department Store and Hua Lian (Group) Co., Ltd.
1. Motive and value of M&A 
2. M&A procedure 
3. Solution and lesson of M&A 
4. Strategic integration 
Section 2 Beijing Wangfujing Department Store Co. Ltd. (Group) took over Xuzhou Hua Lian
 Commercial Building
1. Motive and value of M&A 
2. M&A procedure 
3. Solution and lesson of M&A 
4. Strategic integration
Section 3 Reorganization of Brilliance Group Co., Ltd
1. Motive and value of M&A 
2. M&A procedure 
3. Solution and lesson of M&A 
4. Strategic integration
Section 4 Wu Mart purchased Yinchuan Xinhua Supermarket
1. Motive and value of M&A 
2. M&A procedure 
3. Solution and lesson of M&A 
4. Strategic integration
Section 5 China Resources purchased Vanguard 
1. Motive and value of M&A 
2. M&A procedure 
3. Solution and lesson of M&A 
4. Strategic integration
Section 6 Intime Department Store Group Co., Ltd purchased Baida Group Co., Ltd
1. Motive and value of M&A 
2. M&A procedure 
3. Solution and lesson of M&A 
4. Strategic integration

Chapter 13 Competitiveness among Major Player of M&A in China’s Supermarket Industry
Section 1 Brilliance Group Co., Ltd
1. Capital operation 
2. Production and marketing capability 
3. Strategy for development 
4. M&A and feasibility of M&A 
Section 2 Shanghai Kaikai Commercial City Co., Ltd. 
1. Capital operation 
2. Production and marketing capability 
3. Strategy for development 
4. M&A and feasibility of M&A
Section 3 Shanghai Yuyuan Tourist Mart Co., Ltd.
1. Capital operation 
2. Production and marketing capability 
3. Strategy for development 
4. M&A and feasibility of M&A
Section 4 Pacific Department Store Co Ltd.
1. Capital operation 
2. Production and marketing capability 
3. Strategy for development 
4. M&A and feasibility of M&A
Section 5 Beijing Wangfujing Department Store Co. Ltd. (Group)
1. Capital operation 
2. Production and marketing capability 
3. Strategy for development 
4. M&A and feasibility of M&A
Section 6 Xidan Market 
1. Capital operation 
2. Production and marketing capability 
3. Strategy for development 
4. M&A and feasibility of M&A
Section 7 Yinchuan Xinhua Supermarket
1. Capital operation 
2. Production and marketing capability 
3. Strategy for development 
4. M&A and feasibility of M&A
Section 8 Guangzhou Friendship Store
1. Capital operation 
2. Production and marketing capability 
3. Strategy for development 
4. M&A and feasibility of M&A
Section 9 ChongQing Department Store Co.Ltd
1. Capital operation 
2. Production and marketing capability 
3. Strategy for development 
4. M&A and feasibility of M&A
Section 10 Shennan Rainbow Department Store
1. Capital operation 
2. Production and marketing capability 
3. Strategy for development 
4. M&A and feasibility of M&A

Chapter 14 M&A Possibility in China’s Supermarket Industry 
Section 1 M&A possibility in big firms 
1. Shanghai Kaikai Commercial City Co., Ltd.
1.1 M&A possibility 
1.2 M&A value 
2. Pacific Department Store Co Ltd.
2.1 M&A possibility 
2.2M&A value
3. Xidan Market
3.1 M&A possibility 
3.2M&A value
4. Guangzhou Friendship Store
4.1 M&A possibility 
4.2M&A value
Section 2 M&A possibility in medium and small firms 
1. Hefei Department Store Group Co., Ltd
1.1 M&A possibility 
1.2 M&A value
2. Wuhan Zhongbai Group Co.,Ltd
2.1 M&A possibility 
2.2 M&A value
3. Wuhan Zhongnan Commercial (Group) Co., Ltd
3.1 M&A possibility 
3.2M&A value
4. Hua Lian (Group) Co., Ltd.
4.1 M&A possibility 
4.2M&A value
5. ShenYang Spring Department Store Co., Ltd
5.1 M&A possibility 
5.2M&A value
6. Chongqing Sanli Department Store
6.1 M&A possibility 
6.2M&A value
7. Chongqing Liyang Department Store 
7.1 M&A possibility 
7.2 M&A value
8. Zhejiang Haotian Department Store Co., Ltd.
8.1 M&A possibility 
8.2M&A value
9. Zhongyou Department Store
9.1 M&A possibility 
9.2M&A value
10. Grand Pacific Department Store
10.1 M&A possibility 
10.2M&A value

Chapter 15 M&A Risk in China’s Supermarket Industry 
Section 1 Asset reshuffle 
Section 2 Corporate management 
Section 3 Entrepreneurial culture 
Section 4 Business risk 

Chapter 16 Recommendation for China’s Supermarket Industry 

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