Some analysts have expressed concern over yesterday’s announcement that Tesco plans to expand into China, according to newspaper reports.
Tesco is confident that it has carried out enough research to consider China to be a suitable location for expansion overseas. But some analysts have pointed out that: “Research and experience do not amount to the same thing,” as reported in today’s Daily Telegraph,
Although other supermarket chains have made a success of ventures in China, such as Wal-Mart and Carrefour, who has built up 41 stores there over nine years, the report pointed out that some retail giants had not always had the same success overseas.
Boots was forced to withdraw from Thailand and Japan after recording sales losses, and Sainsbury incurred debts after withdrawing from its Egyptian joint venture in 2001.
Tesco already has stores in South Korea, Japan, Taiwan and Thailand, which contributed to 30% of its international profit growth last year.