Wal-Mart is "acclimatized" in China

It is understood that the full name of Wal-Mart is Wal-Mart Department Store Co., Ltd. Since the first store was opened in Arkansas, USA in 1962 by American retail legend Sam Walton, after more than 41 years of development, Wal-Mart has developed into the world's leading retail giant. At present, there are more than 6,611 Wal-Mart stores in 16 countries including China. In 2115, Wal-Mart's global sales reached US$ 312.4 billion, ranking first among Fortune Global 511 companies for many years in a row, and ranking among the magazine's "most respected enterprises". At the same time, Wal-Mart has been rated as one of the "most admired enterprises" and "the most suitable enterprises for work" by many countries around the world.

Since Wal-Mart entered China in August, 1996, and opened the first Wal-Mart shopping plaza and Sam member store in Shenzhen. Up to now, 73 branches have been opened in 36 cities across the country. Wal-Mart has been pursuing the policy of "talent localization", which has provided a large number of employment opportunities for local residents in recent years, and also trained a large number of talents for the local retail industry. At present, Wal-Mart has more than 31,111 employees in China. Like Wal-Mart all over the world, Wal-Mart also adheres to the fine tradition of Wal-Mart in China, that is, it focuses on opening every store and serving every customer well, and always provides customers with high-quality and affordable products and friendly customer service.

It is understood that this giant company once hoped to create a sales miracle of US$ 111 billion in China with great ambition. However, in the past 11 years, Wal-Mart originally hoped that "grinding a sword for ten years" could draw the sword out of its sheath. However, after many hardships and twists, it was not satisfactory, and it is still at a loss. This makes it extremely difficult for Wal-Mart to achieve the goal of this emerging market in the face of the American-style Wal-Mart experience and the strong consumer culture in China.

In the eyes of local rivals, Wal-Mart is obviously not as terrible as originally imagined. "Wal-Mart needs to make efforts in localization, which leaves us an opportunity." Zhang Wenzhong, chairman of Wumart Group, said that the Wumart Group he was in charge of had sales of 13.5 billion last year and was listed in Hong Kong in 2113. Zhang's other identity is Commissioner Chinese People's Political Consultative Conference, and he is also an advocate of "excessive opening of foreign investment in retail industry" in China. For a long time in the past, the view represented by Zhang believed that the retail industry in China would be vulnerable under the impact of the strong foreign retail industries of Carrefour and Wal-Mart.

From the panic of "wolf coming" to asking "Is Wal-Mart ready?" Zhang's point of view witnessed the changes in the competition pattern of China's retail industry-the growth of domestic retail industry and the exploration of the localization of foreign retail industry. On February 11, 2114, China's retail industry was fully opened to foreign investment, and domestic and foreign retail enterprises began to compete on the same level.

If the early Wal-Mart was bound by policies, then the next few years will be a crucial moment for Wal-Mart to compete with international competitors and growing local competitors. Can Wal-Mart achieve its goals? Can David Glass, the second CEO of Wal-Mart, fulfill his oath-"China is the only country on earth where Wal-Mart can create another $111 billion in sales"? When the CEO made this grandiose remark during his visit to China in the mid-1991s, all the people present at that time took it for granted and didn't blink.

China's dilemma of business model

Wal-Mart, a recognized world retail giant, is still in a state of loss after landing in China market for 11 years. Compared with its grand occasion in the United States, it is simply an underground place. While it is trying to break through the predicament in China market, Wal-Mart has also suffered disastrous losses in many markets, so it has to withdraw from those markets, such as Germany and South Korea.

from the initial entry into China and the opening of the first Sam member store in China in 1996, the "retail overlord" showed a lack of understanding of the China market.

It is reported that Wal-Mart believes that its success in the United States comes from two key factors: 1. Stores are located in remote rural areas and small towns, and rural areas surround cities. 2. Expansion mode, that is, pushing from the inside out, will never learn to run before learning to walk. The ability to push from the inside out is the core competitiveness of Wal-Mart. Everyday parity and scale advantage benefit from excellent logistics distribution ability (replenishment ability) and business ability to attract customers' loyalty. However, these core competitiveness are still difficult to be reflected in China.

But in China, the consumption power of urban population is much higher than that of rural areas, so it is difficult to achieve the same development as that of the United States by taking the rural route.

Similarly, Wal-Mart's second core competitiveness is difficult to show because its commercial outlets are far from scale advantages and suppliers' capabilities are insufficient.

It is reported that Wal-Mart has very strict requirements on the distribution of goods. Except for fresh and daily suppliers, the distribution center needs to make an appointment first-delivery is required at 12 noon, and if it arrives at 13 o'clock, it will have to queue up again. It is difficult for most local suppliers to match Wal-Mart's time management in supply chain management and networked logistics distribution system. When the supplier delayed the delivery, Wal-Mart refused to accept it, so it had to make an appointment again and redistribute it, which increased the cost of the supplier.

according to wal-mart's operation mode in the United States, it usually centers around a regional distribution center, and a powerful distribution center can support 121 stores and serve stores within a radius of 511 kilometers. Wal-Mart's dense distribution in many small towns can effectively play the economies of scale of logistics centers. This reduces the logistics cost of Wal-Mart. However, by the end of 2115, Wal-Mart had only set up two distribution centers and 55 branches in China, which was larger than the United States. The layout was also extremely scattered, and the scale effect of logistics was also restricted.

In the United States, Wal-Mart relies on its operating system to make the price of its goods 15% lower than that of its competitors. However, in China, due to the wide distribution area and extremely low density, it is impossible to unify the procurement of most commodities, because the increased logistics cost will be far higher than the price advantage achieved. Therefore, except for the unified procurement of several stores in Shenzhen, most of the goods in other stores are almost entirely purchased by a single store.

what is even more frightening is that consumers' purchasing habits have become the biggest challenge for Wal-Mart in China. It is reported that, unlike American consumers, China consumers are more impulsive than target-oriented shopping. In addition, at present, China consumers spend the most food in supermarkets, and food is the last thing consumers want to store for a long time.

What makes Wal-Mart even more troublesome is that China consumers mostly visit Wal-Mart as a leisure lifestyle, with a small amount of one-time shopping but high requirements for the freshness of goods; Not only that, but the tastes of consumers in different parts of China are very different. How can Wal-Mart with unified procurement adapt to it? When local retailers in China put up the promotion signs of "parity every day", "students are learning from teachers, and teachers at Wal-Mart don't even know what kind of promotion methods to adopt", said a former senior manager of Wal-Mart.

Wal-Mart's Great Leap Forward in China

In p>2115, Wal-Mart, which had been operating steadily in the China market, finally made a big move. With the great changes in the management of Wal-Mart in China, a series of new deployments in China have also come out. Wal-Mart's purpose is obviously to seize the opportunity after the opening of the retail industry.

In addition, Wal-Mart has also adjusted its development strategy at the same time as the top management changed hands.

On March 21th, 2116, Wal-Mart announced that it would vigorously expand the China market and recruit 151,111 new employees in China within five years. It is understood that at present, Wal-Mart has only 451,111 overseas employees.

According to public information, in the next 3-5 years, Wal-Mart will open 51 stores in China, with the target of focusing on three major cities in China: Beijing, Shanghai and Guangzhou. In the second-tier cities with slow progress, Wal-Mart realizes rapid distribution by acquiring other enterprise outlets.

In addition, Wal-Mart has invested 711 million yuan to build a new global procurement center in Shenzhen, which will manage Wal-Mart's global procurement network of US$ 191 billion (S $313.5 billion) after completion.

At the same time, Wal-Mart is actively looking for new profit points while adjusting its strategy. According to reports, Wal-Mart has submitted an application to Guangdong Food and Drug Administration to set up a retail counter for Class B prescription drugs, and it has been approved.

In recent years, behind a series of actions, Wal-Mart has hidden its ambition to regain lost ground in the China market.

But compared with Carrefour, Wal-Mart's old international rival, the speed of Wal-Mart in China is really too slow. Data show that in 2115, the operating income of Wal-Mart's China supermarket was more than 711 million dollars, while that of Carrefour's China supermarket was 2.17 billion dollars. Taiwan Province Trust-Mart announced that the performance of supermarkets in China in 2115 was also $1.42 billion.

According to experts' analysis, the embarrassment of the world's largest retailer in China market is related to its own development strategy in China market. As it has never been able to enter Shanghai, Wal-Mart has not only lost the largest urban market in China, but also greatly hindered its China strategy. Therefore, Wal-Mart adopts the decentralized layout of four major plates: South China, North China, Northeast China and Southwest China. However, this decentralized layout makes it difficult for Wal-Mart to play its role in leading its competitors' core competitiveness-a strong logistics system.

Zhang Wenzhong, the chairman of Wumart Group, a well-known domestic retail enterprise, once warned the bosses of major retail enterprises at a retail seminar that it would be suicidal for domestic enterprises to expand behind Wal-Mart. He said that this kind of decentralized distribution is not only difficult to support logistics and supply chain, but also can not form economies of scale, and the cost of goods can never be suppressed. That's exactly what happened.

In terms of the quantity of goods purchased, Wal-Mart can't get much preferential prices from suppliers. In the United States, Wal-Mart's success depends on the price that is 15% lower than that of its competitors.

The reporter also learned that Wal-Mart has sold its 16 stores in South Korea for 825 billion won (about 867 million US dollars) to New World, a local market leader. In the future, Wal-Mart will focus its business on "the place that can have the greatest impact on the company's growth strategy", that is, China and Latin America.

Dong Yuguo, the public relations director of Wal-Mart in China, said that in 2116, Wal-Mart planned to open 18 to 21 stores in the China market.

It is not difficult for people who are concerned about Wal-Mart's development to find that the number of new stores in Wal-Mart China this year is almost the sum of the number of stores opened in the past five years. In addition to the increase in the number of stores, we can clearly find the regional division map of Wal-Mart in China by studying the distribution of Wal-Mart's stores. Apart from Shenzhen as the center in South China, the regional development pattern of Wal-Mart with Kunming as the center in Southwest China, Beijing as the center in North China and Dalian as the center in Northeast China has taken shape. With the opening of central stores in various regions, Wal-Mart's development strategy in China has been launched.

Shenzhen was not the main battlefield. It is understood that Wal-Mart first hoped to enter Shanghai in East China. After the negotiations with its partners failed, Wal-Mart moved its headquarters in China to Shenzhen. According to the analysis of Professor Gu Guojian, a well-known retail expert, this relocation has strategically caused Wal-Mart to lose one of the largest urban markets in China, because geographically speaking, Shanghai is the most strategic commercial place to make a breakthrough in the middle road (the Yangtze River Corridor) and two wings of Qi Fei (south to north). At the same time, the southern region is mostly a small-scale supplier, so it is difficult to cooperate with Wal-Mart in the layout of the national market in terms of concept and strength.

Wal-Mart once said that it would be saturated if it opened up to 15 stores in Shenzhen. Therefore, the future development of Wal-Mart will focus on other places. As you can imagine, if Wal-Mart is too ostentatious in Shenzhen, it will easily arouse the resentment and vigilance of retail enterprises in other cities. With the goal of looking at the whole country, Wal-Mart's approach seems understandable.

It's not so much that Wal-Mart doesn't have a big advantage in the competition as that Wal-Mart doesn't want to start a war.

While exploring the experience in Shenzhen, Wal-Mart is also cautious in its external expansion. Although Wal-Mart has long planned to enter some key areas, as long as the government does not approve, Wal-Mart will not open stores. Therefore, in the eyes of the government, Wal-Mart is also a law-abiding image.

Even so, Wal-Mart has basically completed its strategic intention of setting up a branch office in China in the whole country in a few years. Although in most people's impression, Wal-Mart has been active in the south, and in the external publicity, Wal-Mart has always maintained a low-key and cautious. But it is undeniable that Wal-Mart has never stopped weaving and spreading to the national giant network in silence.

In p>2115, Wal-Mart and Carrefour both focused their expansion in China on important cities such as the west and Beijing. As the bridgehead of western development, Xi 'an naturally became the key city for the expansion of the two retail giants. It is reported that Carrefour's Xi 'an store has been reopened after several adjustments.

Not only that, Wal-Mart also abandoned its usual suburbanization model in site selection, and began to learn from its old rival Carrefour and go downtown. It is reported that its new stores in Shenyang, Guiyang, Nanning and Xi 'an are all located in the city center. When reviewing the company's development strategy in 2114, Zhong Haowei, president of Wal-Mart Asia, also said that the lack of flexibility led to the inefficiency of Wal-Mart in the China market. Now, Wal-Mart is starting a Chinese-style transformation from different directions.

Wal-Mart's step-by-step development in China market has not shown an aggressive attitude, but in the next five years, Wal-Mart's speed increase in China market is obviously based on its "parity" advantage.

under the concept of "parity every day", Wal-Mart is a global leader in cost control in procurement, logistics, information technology application, store management and many other aspects. However, in the China market, Wal-Mart's existing scale can not be reflected in these aspects, and Wal-Mart has not been able to gain the same status in the China market as it does in the world.

"For a long time, Wal-Mart has always concentrated in South China, Northeast China and Southwest China, and failed to expand to the whole country." Expert analysis believes that. Wal-Mart's "sword-leaning" decentralized distribution method has been criticized by the industry as a typical failure of network construction. However, with the strong entry of Shanghai and the central and western regions this year, and the continuous consolidation of North China, with Beijing as the leader, Wal-Mart has basically completed its nationwide distribution and formed a pattern of close combat with Carrefour.

people in the industry generally believe that Wal-Mart's absolute advantage in China market lies in its scale. When its scale in China market reaches a certain level, Wal-Mart will have a terrible competitive advantage. Therefore, the industry is not surprised that Wal-Mart will greatly accelerate its development in the next five years. Pei Liang, Secretary-General of China Chain Store & Franchise Association, said that with the gradual opening of the China market and the gradual decentralization of foreign investment approval, Wal-Mart has sufficient conditions to start the acceleration of China. It is not impossible to open 311 stores in five years.

For Wal-Mart, it's obvious that it can't be frustrated in the China market again. Similarly, Wal-Mart is also increasing its investment in China. Wal-Mart announced its expansion plan in China one week after it announced its expansion plan in Central America. Central America is another fast-growing market. The business development of Wal-Mart International Department has exceeded last year.