Excerpted from the Web site Cool News of the Day:
Wal-Mart de Mexico. Or Walmex, if you will, “is not a carbon copy of its U.S. parent,” but it “is the largest retailer in Latin America and…the largest private employer in Mexico,” reports Kerry A. Dolan in Forbes (9/1/01). Walmex claims “26 percent of Wal-Mart’s $40 billion in international sales, the second-largest share after its U.K. operations.” And even though “the Mexican retail market contracted 1.8 percent” last year, Walmex profits “grew 12 percent, to $476 million — at 4.7 percent, a fatter margin than the 3.3 percent its parent netted.” “We think Wal-Mart de Mexico is a very good model,” says John Menzer, who is president of Wal-Mart’s international division, and is already applying Mexican lessons learned to the Japanese market.
The model is to start small, relatively, as Wal-Mart did in 1991 when it initially “formed a joint venture with Mexican retailer Cifra.” Wal-Mart actually waited six years before acquiring a majority share (62 percent) in Cifra, and another three years before changing its name. What Wal-Mart acquired from Cifra was a total of “six different formats, including apparel and restaurant chains that cater to the disparate income segments of the Mexican population.” For example, Bodega Aurrera is for low-income Mexicans, while Superarama supermarkets cater to “middle and upper-income customers in urban areas.” Then there are the Wal-Mart Supercenters and Sam’s Club stores that are pretty much like those in the U.S.