Metro abandons China JV
Media Saturn, a subsidiary of German retail giant Metro, has finally confirmed that it will discontinue its business operation in China.
The company, together with Taiwan’s Foxconn Technology, operates a consumer electronics chain called Media Markt in China. The withdrawal comes amidst stiff competition in the market, making it hard for the chain to remain profitable.
“After carefully analysing all alternatives, we have decided not to continue our business activities,” said Olaf Koch, chairman of Metro Group.
“In order to keep Metro Group on target for success, it is essential for us to concentrate on those business units and markets where we can clearly sharpen our profile and build up a strong market position,” he added.
Metro remains committed to the Chinese market as it plans to intensify its wholesale business Metro Cash & Carry in the country.
“The country is key and a promising market with good future prospects for our wholesale business,” said Koch.
The retailer opened 12 cash and carry stores in China last year – the highest number of stores it opened in one year in one country in its entire history.
The retail giant said consolidated sales at its wholesale stores grew by 1.6 per cent in financial year 2012 with strong growth recorded in Asia. With the exception of Vietnam, like-for-like sales increased significantly in all countries – by double-digit figures in some cases.