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The Great Wal Mart of China Presented By: Brittany Risser, Brent Pleasant, Patricia Moon
Opening Day in Chongqing • “We can’t wait for Wal-Mart to open. We’re practically counting the days.” – Li Daping • 120,000 customers • By 8am: line for 85 cent rotisserie chicken is 50 people • 75 checkout lanes are 15 people deep
Plans for China • Executives view China as best bet for long term growth • 100 cities with populations of 1 million or more • $6 trillion in total retail spending each year • Will open 15 new stores in 2005 • China stores grossed less than 2% of international sales • Numbers have nowhere to go but up • Have 230 stores by 2009
Catering to Local Needs • Chinese do shopping by foot, have smaller living spaces, and smaller refrigerators • Will buy in smaller quantities • Devote more floor space to food products • Like to touch items and try out • Sales associates will take items out of packaging and demonstrate their uses • Bundling products together • Eg: Red wine with free cans of Sprite
Catering to Local Needs • Offering local food favorites • Spicy chicken feet, tofu, live lobsters, turtles and bullfrogs • “Retail-tainment” • Space for school groups to perform • Organized daily activities for the elderly
Hurdles to Overcome • Finding qualified managers • Hiring and training of 500 employees per store • Finding sites for stores • State owned retailers have priority • Competitors • Shanghai’s Brilliance Group (3,300 stores) • France’s Carrefour • Vows to match Wal-Mart’s expansion in China store for store
Wal-Mart and China • Expansion plans too timid • Not only open stores, but plans to purchase more product for US stores • In 2005, only bought 10% products from China • Will pit American workers against Chinese • “My job is to find the best value for our customers…China gives us a competitive products…There is no reason for us not to buy there.” Andrew Tsuei