The Woes of Foreign Retailers in China.docVIP

The Woes of Foreign Retailers in China 　　Marks Spencer Group PLC plans to close five China-based stores by August 2015， as the Britain’s largest apparel retailer is facing the agony of not being acclimatized to the Chinese soil yet. 　　Back in 2008， Marks Spencer opened its first store in West Nanjing Road， Shanghai， making its presence felt in the world’s largest market. After several years of gung-ho expansion across the Chinese mainland， the UK retail giant now has 15 stores in China with seven in the most prosperous metropolis Shanghai. However， the number is soon to become ten. 　　 UK Retail Giants Fall from Grace 　　Businesses rise and they fall. Marks Spencer is not the first British retail giant to lose its luster. UK supermarket chain Tesco PLC， as well as home improvement retailer BQ PLC， had faced setbacks in the Chinese market. 　　Last year， Tesco snapped its nine-year go-it-alone expansion and entered into a joint venture with state-owned China Resources Enterprise Ltd， merging its unprofitable operation into the JV. China Resources Enterprise dominates the newlyestablished company with an 80% stake， while Tesco only has a 20% stake. 　　According to Tesco， the JV combines its retail practices， international sourcing and multichannel capabilities with China Resources Enterprise’s strong local knowledge and brand. In fact， however， with Tesco only taking a minority stake in the China-based JV， the tie-up marks a humiliating retreat for the UK retailer in many people’s eyes. 　　Tesco said problems negotiating with suppliers and regulators， coupled with soaring rent and labor costs， caused its failure on the Chinese mainland. Growing fierce competition from rivals Carrefour SA and Wal-Mart Stores Inc， as well as the online retailers， also exacerbated the plight of Tesco. 　　BQ， UK’s largest home improvement company owned by Kingfisher Group， tells the same tale. The home improvement retailer made its first foray into China in 1999， in a bid to ride