A Study On The Localization Strategy For Hypermarket In China

As the world’s economic globalization are dynamically developing, the case of multinational companies expanding to overseas markets are also increasing more and more. Global retail companies have an increasing trend of globalization, multinational mart in China reveals more prominent. The consumer market is dominated by multinational companies through their active implementation of localization strategy. Localization is already an essential strategy of the leading multinational companies, as well as one of the most important trends of global multinational companies. Multinational companies in China are developing rapidly, based on their large-scale and well-organized system. Nevertheless, global companies with sufficient capital also face challenges of high overseas market entry barriers, cultural, ethnic, and other consumer differences. Without understanding the characteristics of the host country market, consumer behavior, and consumer trends, multinational companies are bound to fail. The lack of experience in foreign markets and marketing strategies of low activity due to low awareness of the corporate brand or company will give a toll on competitiveness. Therefore, multinational retail enterprises should implement their localization strategy through production, marketing, research and development, and management to expand market share within China. Retail enterprises include wide range of market from department store, hypermarket, and supermarket, to specialty convenience stores. This paper studies localization of hypermarkets among large retail companies, analyzing Lotte Mart as a case. Lotte Mart is one of the top three retailers in Korea., When Lotte Mart expanded into the Chinese market, they accomplished surprisingly fast growth. The same also applies to markets in Vietnam, Indonesia and other countries. Compared to the Chinese local firms and other multinational companies, however, Lotte Mart needs continuous development.In general, it is not hard to find a case where the foreign capital enterprise ignores the characteristics of the local market, consumer culture and characteristics. Lotte will not be able to succeed if it fails to understand the Chinese market. E-Mart was the first to enter the Chinese market among large Korean distributors. Being a strong no.1retail enterprise in Korea, E-Mart also has17years of history in China since1997. However, due to lack of experience and understanding of the Chinese market, their sales are dropping more and more, with the management performance also in a very bad sleep. In order to avoid experiencing of the road of E-Mart, this paper studies the localization strategy and operational limitations of its strategy of Lotte Mart for the further development.In this paper, literature review of comprehensive theories in global cooperates and localization strategies are be followed by the study of global marts’localization strategy in China. By studying the Chinese retail market, the current status of industrial and consumer markets, there were some findings that the Chinese market has several characteristics. To enter the Chinese market, enterprises must first know the characteristics of China’s retail business and the characteristic of Chinese consumer market. In this paper, study of development strategies in China will be done with the case of Lotte Mart, as well as an introduction and brief comparison of Lotte Mart Korea and China. Analysis on the production, marketing, and management in Lotte Mart’s localization strategy in China and its limitations will also be discussed. In the conclusion, after briefly summarizing Lotte Mart’s localization strategy, some recommendation on Lotte Mart were made, closing with the limitations of this study and future research directions.