The great wal-mart of china

1. The great wal-mart of china Jordin Roth Alyssa Durham

2. Opening day • Huge ordeal • Brass band, fire-breathing Sichuan opera dancers, and a traditional lion dance • Positive reaction from consumers • By closing time 120,000 customers went through the doors and purchased items

3. trends • Chinese customers tend to do shopping on foot, not car • They have smaller apartments/appliances • Perishable products get pride of place and come in mind-boggling assortment of shapes, colors, and flavors • Want to put hands on merchandise • Chinese shoppers have a thing for clamor

4. History • Slow start up • Company sent an advance team of executives to China in 1994 and two years later opened the first Wal-Mart supercenter in Shenzhen • Impressive demographics • 100 cities with populations of more than a million • 150 million urban families with annual incomes of more than $10,000 • More than $6 trillion in total retail spending

5. Strengths • Wal-Mart’s innovation of “retail-tainment” • Stores provide space for local school groups to perform, and they organize daily activities for the elderly • Residents are welcome to wander in and freeload on air conditioning • Savvy marketing • Wal-Mart buys only about 10% of what it sells in U.S. stores from suppliers in China • Consumer’s obsession with ‘everyday low prices’ • Men’s dress slacks- $8 with alterations • Dress shoes- $4.80

6. Weaknesses • Biggest challenge is finding qualified managers • Each supercenter requires hiring and training 500 employees • Locating sites is tricky • Municipal governments control prime real estate, giving an edge to state-owned retailers • Wal-Mart can’t sustain the U.S. growth rates of the past decade • Possibly needing help from overseas

7. Opportunities • Executives have viewed China, with its vast population and booming economy, as their best bet for long-term global growth • Former CEO proclaimed China “the one place in the world where you could replicate Wal-Mart’s success in the U.S.” • Sight of truck and taxi drivers on the side of the road helped boost midday store traffic by luring in customers from local street vendors • Expand to make online shopping available in China

8. Threats • “In America, Wal-Mart may be the 800 pound gorilla, but in China, it’s still a chimp” • Competition • Chinese companies such as local markets • State-run Shanghai Brilliance group- China’s largest retailer with 3,000 stores • France’s Carrefour

9. Future of wal-mart in china? • Scope of Wal-Mart’s ambitious and enthusiastic shoppers at recent store openings leads to timid expansion plan • Even if Wal-Mart adds stores at a rate faster than this year’s place, its China retail network will include no more than 230 stores by 2009 • That’s fewer than the number of stores Wal-Mart will add in the U.S. this year • As of now, 2012 • 370 stores in 140 cities • Created over 106,500 job opportunities across China

10. discussion • Has anyone been in a Wal-Mart in China? • Other countries? • Can you think of other American stores/supercenters that are majorly successful in China? (Or other countries?) • Do you think the strategies used for China’s Wal-Mart are successful both short-term and long-term? • Why or why not?