Sahil Puri (11037)(08-10)

UIAMS, PU

Wal-Mart in China
 Wal-Mart | International

• Wal-Mart Stores, Inc. is an American public corporation that runs a

chain of large, discount department stores. It is the world's largest
public corporation by revenue, according to the 2008 Fortune
Global 500.
• Founded by Sam Walton in 1962, it was incorporated on October 31,
1969, and
•
• Headquarters: Bentonville, Arkansas, USA
• Revenue: US$ 404.16 Billion (2009)
• Operating income: US$ 30.07 Billion (2009)
• Net income: US$ 13.59 Billion (2009)
• Total assets: US$ 163.514 Billion (2007)
• Total equity: US$ 64.608 Billion (2007)
• Employees: 2,100,000 (2008)
World of Wal-Mart
MAGAZIN
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LIVING

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 Wal-Mart in China

•
• Wal-Mart began its retail operations in China in 1996 with the opening
of a Supercenter and Sam’s Club in Shenzhen.
•
• Wal-Mart now has 146 stores in China, covering 89 cities, including
138 supercenters, 3 Sam’s Clubs and 2 Neighborhood Markets.
•
• Wal-Mart purchased a 35% interest in Trust-Mart and owns 102 Trust
Mart stores. Now Wal-Mart has brought over 70,000 job
opportunities in China.
•
• Wal-Mart actively participates in community service and charity events
and has donated funds worth more than US$ 8 million to local
communities over the past 12 years.
•
•
 Wal-Mart in China

• Experts pointed out that Carrefour had been successful in China

because it had been able to study Chinese consumers through its
venture in Taiwan, while Wal-Mart did not have any such
experiential advantage. Also, Wal-Mart did not make use of its first
mover advantage and expanded slowly in China.
•
• Wal-Mart planned to increase the number of its stores in China from
48 in 2005 to 90 in 2006.
•
• The company sold goods worth $940 million and purchased to
the tune of $18 billion from Chinese manufacturers in 2004,
thus having a substantial presence both as a purchaser and a
seller of goods in China.
•
• In December 2004, the Chinese government eased restrictions on
foreign retailers to fulfill its commitments as a World Trade
Organization (WTO) member.
•
 Recognition in China

• Wal-Mart China persists in local procurement which provides more job

opportunities, supports local manufacture industry and promotes
local economy. So far, 95% of merchandising sold at Wal-Mart
China store are local products by which Wal-Mart has established
business relations with nearly 20,000 suppliers.


• In China, Wal-Mart has won many awards, including,



• Supplier Satisfaction by Business Information of Shanghai for five consecutive

years
• Best Employer for University Student
• Leading Multi-National Enterprise in Asia by Asian Wall Street Journal
• Best Employer in China Retail Industry by CCFA
• China Most Valuable Brand by Fortune Chinese Version
• 2008 Top 10 Best investing Fortune 500 Companies in China by Southern
Weekend Magazine
• Excellent Employer by Fortune Chinese Version
• Multi-Nation Company Charitable Donations by Forbes Chinese Version
• Most Admired Company by Fortune Chinese Version
• Best Community by Guangming Daily

 ENTRY AND EXPANSION STRATEGIES

• Localization Strategies
• Procurement and Distribution
–
• Governance Practices
• At Wal-Mart, associates found a high degree of transparency in
relation to career growth.
• Wal-Mart valued an individual's competence rather than personal
connections when promoting an employee.
•
• The Problem Areas
• The company's supply chain operations were not as efficient
as in its home market.
• Stiff competition from both local Chinese retailers and from
foreign retailers who had established their base in China.
• Even after nine years of presence in China, Wal-Mart was still
very small with just 48 stores.
• Its 2004 sales from the Chinese operations were around 2% of
its international sales.
•
 Businees Categories

• International Business Categories

• There are four Business Categories of Wal-Mart:
• Wal-Mart Supercenters
• SAM'S CLUB
• Wal-Mart Stores
• Wal-Mart Neighborhood Market


• Categories of Wal-Mart in China:




Wal-Mart Supercenter SAM'S CLUB.

 Wal-mart China Corporate Social Responsibility

 Environmental Protection
• Wal-Mart has set three goals in environmental protection: to be
supplied 100 percent by renewable energy, to create zero
waste, and to sell products that sustain resources and the
environment.


 Community Involvement
• Wal-Mart associates actively participated in community
activities throughout China including visiting the elderly in local
welfare centers, supporting the handicapped, and helping
needy families, etc.
 Children Welfare
• Wal-Mart holds a series of community activities that focus
on the welfare of our children, including organizing painting and
calligraphy competitions, making donation to local children
welfare centers and supporting schools for needy and
handicapped children
•
 Education Support


 Disaster Relief
 Hurdles Faced By Wal-mart In China

• Supply chains encounter greater hurdles in China than elsewhere



• Regionalism in China


• Appropriate technology levels



• Nontariff trade barriers:

• A cap on the number of stores a company can open
• Vague testing and labeling laws
• Financial matters:
• A company with joint ventures in several locations
supplied by one may have to make a separate payment
from each venture.
• China still depend heavily on a hard-copy paper flow of
documentation, which adds cost, requires excess
manpower, and creates opportunities for human error


• LTL (less-than-truckload) and private, nationwide parcel delivery.




Serving Different Market Segments
EDLP Save Money
Live Better
Local Merchandising
Wal-Mart & Trust-Mart Partnership

黑龙江

吉林

新疆 辽宁

宁夏
内蒙古
北京
河北

青海 山西
山东

西藏 陕西
河南 江苏

四川
河北

湖南 江西
贵州 福建

云南
广西 广东


Thanks