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The Great Wal-Mart of China

The Great Wal-Mart of China. Julie Forrest Shalene Rhodes. For the world’s biggest company, the key growth lies in the world’s biggest country. WAL-MART PLANS FOR CHINA. 15 new stores this year including its first super centers in Beijing and Shanghai

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The Great Wal-Mart of China

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  1. The Great Wal-Mart of China Julie Forrest Shalene Rhodes

  2. For the world’s biggest company, the key growth lies in the world’s biggest country

  3. WAL-MART PLANS FOR CHINA • 15 new stores this year including its first super centers in Beijing and Shanghai • Board of directors tells Asian CEO Joe Hatfield “Get a lot more aggressive” • Grossed only $916 million in China, less than 2% of Wal-Mart’s international sales and a tiny sliver of its $288 billion revenue

  4. OPENING DAY –CHONGQING, CHINA • 7:30 am doors open: truck load of roasted duck sells out in minutes • 8:00 am: queue for rotisserie chicken at .85 cents a bird is 50 people long • 9:30 am: ceremony in public square with brass band, fire breathing Sichuan opera dancers and a traditional lion dance • 10:00 am: 75 checkout lanes backed up 15 customers deep • 10:00 pm: Closing; 120,000 have been through the store!

  5. BIGGEST CHALLENGE? FINDING QUALIFIED MANAGERS EACH SUPERCENTER REQUIRES HIRING AND TRAINING OF 500 EMPLOYEES

  6. LOCATION, LOCATION, LOCATION • By opening a super center on the upper reaches of the Yangtze River, it establishes a beachhead for expansion into China’s densely populated eastern seaboard • Prime location: Nine Dragon Plaza, across from the municipal zoo • More than a million people live in a 4 mile radius • Lure customers? Open 1 ½ hrs. earlier, close later and deploy a fleet of shuttle busses to ferry nearby residents

  7. WHAT DO CHINESE CONSUMERS WANT? • Hatfield: “I am a big believer in Sam’s philosophy that when it comes to good ideas you should steal shamelessly” ( He scouts competition to find out what the consumer wants) • Chinese consumers shop on foot, have smaller apartments and refrigerators and used to going shopping every one or two days

  8. DAILY SHOPPING • They like to put their hands on the merchandise, such as shucking corn or making an associate take a twin sheet out of the package and place it on a bed • They like their cabernet carbonated; Wal-Mart sells red wine with Sprite • No more slaughtering poultry on the premises, or offering live rabbits and snakes, but they love spicy chicken feet and stinky tofu! daily shopping-toadsdaily shopping - crabs

  9. “Retail-tainment” • Store provide space for local school groups to perform • Organize daily activities for the elderly • Residents welcome to wander in and freeload on the air conditioning • Red shirts, mass cheering, incessant pep rallies…far better suited to the People’s Republic than to the American South • Retail-tainment

  10. MADE IN AMERICA? • Although the shelves bristle with U.S. consumer brands, such as Crest toothpaste and Clairol shampoo to Gatorade, almost everything is made in China • Last year Wal-Mart spent $18 billion on merchandise from China based suppliers, accounting for 3% of China’s total exports • If Wal-Mart were a country, it be China’s 6th largest export market

  11. SOURCES • Richardson, John E.,Ed. “Marketing – 80/09 Annual Editions”. McGraw-Hill. Article 43, pg. 189-192. • Toads and Turtles • <www.youtube.com/watch?v=jtKsRM4iHXQ> • Crab shopping • <www.youtube.com/watch?v=0eOafhP2JAM> • Dancing outside of Wal-Mart • <www.youtube.com/watch?v=AA9ZEArVLCg>

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