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Walmart China
6
China
Tatiana Neves K170229
Duc Huy Vu K161525
Nguyen Minh Duy Truong K161263
Chau Minh Thi Nguyen K161169
Séverine Lantin K170451
Structure of presentation
Introduction
- Introduction
- Differences between international and local markets
- Advantages and disadvantages of Walmart in China
- Issues in China’s market
- Walmart strategies in China
- Walmartization
- Recommendations
- Conclusion
Introduction
- Entered into China in 1996 in the city of Shenzhen
- Develop to 424 stores in China only
- Despite of those dramatic expansion, Walmart struggles to survive in China’s market.
Introduction
Differences between US market and chinese market
Discussion
The differences of Walmart in US and China
1.
Demand condition: demographics (religion, income and racial characteristics)
- Sell discount products to middle class in US.
- Popular for everyone, located in big cities.
1.
2.
Culture’s impact
- Fresh food vs Frozen or cooked food
2.
- Tea and wine products
- Pollution masks
Shop Online
3.
Warehouse
- Clear arrangement (US)
- Worse shape, chaos at checkout stations.
- Low-quality retailer (dirty entrance, day’s promotion shouting).
3.
Advantages and disadvantages opening in China
When a company enters into a new market
- The market size
- The cheap labors
- The number of competitors
- The Trademark or trust
- Threats of being a new entrant
- Threats of substitutes
- Competitors and rivalries
- Adaptation with cultures and government.
In China’s market
Political Environment:
- Disturb the political atmosphere
- An increase in protests against China Walmart
Economic Environment:
- The difference in consumer’s behaviors
- The stocking issues
Ex: The infrastructure.
In China’s market
- The largest population in the world ( around 1.4 billion)
- Cheap labors ( $300/month)
- The trademark
Issues
"Everyday low prices"
Considering China as one country
Cheap things don't have a good quality
ISSUES
Digital generation
way of shopping
Big Walmart store china
1/week in USA
vs
2-3/week in china
Traditional chinese stores
Chinese culture in Hosfstede dimensions
Strategy
High face conscious and risk averse
Worth of Mouth communication
Chinese consumers traits
Chinese consumers traits
High collectivist in-group and family
Sensitive to freshness and quality
Walmart strategies in China
Corporate level strategy
- In 1996, opened first store in Shenzhen together with Sam’s Club.
- In 2011, cooperated with Yihaodian for e-commerce then acquired it after 4 years.
- In 2016, joined force with JD.com to target online shopping customers.
Strategies
Business level strategy
- Walmart: hyperstore, supercenter.
- Sam’s Club: high quality products in bulk and general merchandise (membership only).
Imported and local products
Discounted and high-end goods
Delivery services available
Functional level strategy
Walmartization
- Its is possible Walmartize China?
- Have Walmart price strategies influenced and put pressure in Chinese suppliers and affected Chinese workers?
- Have the Walmart policies at Chinese stores affected positively? Or negatively?
- Could Walmart handle the Chinese Unions?
Focus on the future - Sustainability
Improve relationship with Chinese suppliers
Provide high quality good and services
Communicate with Chinese Government
Recommendations
Apply Polycentric view at maximum
Adapt their system to Chinese Culture
Adjust to Chinese consumer habits
Conclusion
Conclusion
- Comprehension of Chinese market and Walmart strategies in China.
- Threats and opportunities of Walmart towards Chinese booming economy.
- Walmart’s vision is to expand, not to survive in China.
Questions
References
- Chan, A., 2011. Walmart in China. United States: Cornell University Press.
- Jun], H. & Yu, J., 2015. Wal-Mart Development in Chinese Market: Problems and Countermeasures—. CSCanada International Business and Management , Volume 10, pp. 11-15.
- Lopes, E., 2018. SupplayChain Dive. [Online]
- Available at: https://www.supplychaindive.com/news/walmart-project-gigaton-china/520273/
[Accessed 2018].
- Wintson, A., 2008. Walmart's New Sustainability Mandate in China. Havard Business Review.