Wal-Mart in China

This month’s issue of Fortune magazine has an in-depth piece on Wal-Mart’s adventures in China. Despite having been operating in China since 1996, the company has just 43 locations operating today (it has 3,719 locations in the US). But it was only recently that foreign retailers got the official green light to expand outside the large cities. The race is on.

And this excerpt pretty much sums up how much Wal-Mart has riding on this country…

Wal-Mart can’t sustain the astronomical U.S. growth rates of the past decade forever. Sooner rather than later, the company will need help from overseas. But the Beast of Bentonville has yet to emerge as a dominant player in any of the foreign markets that account for about 20% of its global sales. In Germany it is still struggling to stanch losses at the two retailers it acquired in the 1990s. In Japan it has yet to articulate a clear strategy for its 38% stake in the troubled Seiyu chain. The company has had better luck in emerging economies, such as Mexico, where there are fewer entrenched incumbents. But executives have long viewed China, with its vast population and booming economy, as their best bet for long-term global growth. In an interview with FORTUNE last year, former Wal-Mart CEO David Glass proclaimed China “the one place in the world where you could replicate Wal-Mart’s success in the U.S.”

As for the Internet, Wal-Mart is in need of a truly global Web design and management strategy. Currently, Web sites are managed locally and have little in common except for the logo. A more consistent template will allow for greater sharing of content between countries and greater efficiencies all around.

PS: Wal-Mart plans to have 90 locations by the end of 2006.

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Author: John Yunker

John co-founded Byte Level Research in 2000 and is author of The Web Globalization Report Card. He also co-founder of Ashland Creek Press.