International Trade in Services.pdf - DSpace at Khazar University

148 International Trade in Services
Box 5.4: Examples of Multinational Retailers with Foreign Affiliates
For wholesale and retail services, investment in the commercial presence of foreign
affiliates is the most significant mode of supply. In the retail sector, the principal
global actors are European and U.S. companies. The greater proportion of sales by
U.S. foreign affiliates in the distribution sector arises from wholesale services, with
only a few large retail groups active internationally, mostly in specialist lines and
franchising. Large European retailers operate in a number of developing countries, as
illustrated in table 5.1. In January 2009, European Retail Roundtable members had
6,117 stores outside Europe. Dominated by multinationals such as Aldi, Auchan,
Carrefour, Metro, Rewe-Zentral, and Tesco, these companies had numerous stores in
developing countries (counting only countries with 10 or more such stores).
Globally, there is a relatively limited number of multinational retailers, and they
are mostly present in large emerging markets that permit foreign participation. Given
that the distribution markets in OECD economies are mostly saturated, these
multinationals generally seek to expand their presence in rapidly growing markets
that are currently protected if income levels are seen as adequate and inward
investment regimes are predictable. For example, following India’s decision in 2006
to allow foreign ownership of 51 percent in single-brand retail companies, a survey of
300 companies revealed that over a quarter had already opened a store in 2007 or
planned to do so. Since Vietnam’s accession to the World Trade Organization (WTO)
in 2007, the country has become the most attractive new emerging market for retail
investors (World Bank 2007). Table 5.2 illustrates the international footprint of five
large retail groups in 2008.
Table 5.1. Stores Owned by European Retail Roundtable Members,
Developing Countries
Argentina 570 India 19 Malaysia 48 Saudi Arabia 104
Bahrain 13 Indonesia 111 Morocco 17 Thailand 522
Brazil 520 Jordan 11 Philippines 19 United Arab Emirates 45
China 608 Kuwait 28 Qatar 14 Venezuela, R. B. de 24
Colombia 81
Table 5.2. International Footprint of Five European Retail Groups, 2008
Tesco
Auchan Carrefour Metro Rewe (United
Name of group (France) (France) (Germany) (Germany) Kingdom)
Employees 209,000 479,000 241,000 290,000 364,000
Presence in number
of foreign countries 12 17 44 15 12
Total number of stores 1,483 8,006 2,003 12,719 4,332
Total sales/turnover €40 €98 €67 €45 £59
(billion)
Sales abroad (billion) — €49 €14 — £18
Source: Company Web sites.
Note: — not available.