Multinational Retail Enterprises To Invest In China And Its Effects On The Status Quo

Since1992, the first joint venture retail enterprises-Shanghai Yaohan opened, to2004, China’s retail sector entered the post-WTO, which are fully opened to foreigninvestment, then to the current foreign retail enterprises accounted for half of China’sretail industry. Now，to get rid of the policy fetters, foreign retail giants are relying onthe advantages of capital，technology，management and other aspects, launching a fullrange of competition in China’s retail market, which is bound to affect the domesticretail enterprises in China. McKinsey Company predicted that， in the next3-5years,60%of China’s retail market was controlled by3-5world-class retail giants，30%of the market was controlled by national retail giants and10%of the market controlledby the regional retail giants.Faced with such challenges，this study sum up transnational business theory，investment theory and other theories, combining theoretical research and empiricalresearch， qualitative and quantitative research, a research method combinedcomparative analysis and system analysis. It invests transnational retail enterprises inChina and their influence to Chinese retail and the whole industry chain system morecomprehensive，and ultimately drew up relevant recommendations.This paper is divided into six parts. The first part is the introduction，which tocombine the theory of foreign direct investment and domestic and internationalresearch， analyzed the motivation of transnational retail enterprises to invest in China，selection of retail business in overseas markets，the international retail business’s way ofentering and the impact of transnational retail enterprises’ investing in China. Thesecond part describe transnational retail enterprises’ four stages of development inChina， and then show the current status of transnational retail enterprises investing inChina in terms of investment scale， investment patterns， investment formatsinvestment area. The third to fifth part based on the SCP analysis mode， measure theimpact of foreign retail enterprises to funded retail enterprises by the measure of marketconcentration， the breakthrough of the barriers to entry， the competition of productdifferentiation and the change of owned retail profit margins. Finally， the sixth partcombined the impact of investment of transnational retail enterprises in to local retailenterprises， putting forward the measure and proposal of guiding and utilizingtransnational retail enterprises to invest in China.