Luc Vandevelde, chairman of the supervisory board at Carrefour, today defended his company’s recent decision to exit the challenging South Korean market.
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Speaking at today’s CIES World Food Business Summit in Paris, Vandevelde stressed the world’s second-largest retailer’s commitment to focusing on those markets where it could achieve sustainable and profitable growth.
“Nearly a decade after entering South Korea, following market deregulation in the mid-90s, Carrefour was still only fifth-placed and real estate prices left us with no realistic hope of taking share from established local players,” stressed Vandevelde.
The company has come in for criticism from the investment community that it effectively forfeited its early mover advantage in the South Korean market by failing to expand its network with sufficient speed or aggression.
The divestment of Carrefour Korea can be seen in the light of its ongoing effort to withdraw from insufficiently profitable non-core activities. Carrefour this week announced it would also exit the Czech Republic, trading its business in the eastern European country with Tesco in exchange for the UK company’s stores in Taiwan.
India, meanwhile, offers exciting prospects for many western retailers eyeing emerging markets, and Vandevelde confirmed his company’s interest in this market.
“India represents a gigantic opportunity for food retailers if and when it opens up to foreign retailers – if you can cope with the chaotic infrastructure and lack of a real supply chain,” he added.
