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Published byBrice Hensley Modified over 9 years ago
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The Great Wal-Mart of China Julie Forrest Shalene Rhodes
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For the world’s biggest company, the key growth lies in the world’s biggest country
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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
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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!
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BIGGEST CHALLENGE? FINDING QUALIFIED MANAGERS EACH SUPERCENTER REQUIRES HIRING AND TRAINING OF 500 EMPLOYEES
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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
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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
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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-toads daily shopping - crabsdaily shopping - crabs
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“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
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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 6 th largest export market
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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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