Marks & Spencer Tmall store to close

Just days after selling its Hong Kong retail business to franchise partner Al-Futtaim, Marks & Spencer has announced it will soon close its Tmall store in the mainland.

The move marks the complete withdrawal from the Mainland China market by the British department store operator, which is now focusing on the domestic market and leaving franchise partners to manage its brand elsewhere.

Announcing the Marks & Spencer Tmall exit, a company spokesman said the online market in the mainland was “highly promotional” by nature and it was too difficult to make money there.

“The complexity and cost of trading, together with the highly promotional online Chinese market means continuing to operate our online business in China is unsustainable,” the spokesperson said.

M&S closed its last 10 physical stores on the mainland in 2016. At its peak it had 15 stores there.

The retailer has had considerably more success in Hong Kong and Macau, with 27 stores transferred to Al-Futtaim on December 30. Unlike in China, where apparel was the focus of its offer, food is at the forefront of the Hong Kong business with a string of stores trading as upmarket supermarkets drawing an expat customer base as well as locals.

Pascal Martin, a partner at OC&C, who was once Asia director for Marks and Spencer, was unsurprised by the Tmall exit.

“The Marks & Spencer Tmall store, even though it had grown nicely over the years, by itself did not generate enough sales to be sustainable,” he said. “We can imagine that M&S partner Al-Futtaim, who just took over the M&S business in Hong Kong and Macau, must have reviewed the potential of this Tmall business in China as well, and probably declined to take it over as a package with Hong Kong and Macau, for the same reasons.”

Comments

Comment Manually

Inside Retail Polls

Does your retail business have a presence on Wechat?
x

SUBSCRIBE
FREE NEWS BRIEFS Get breaking news delivered