10/15/2013 4:15 PM ET|
4 countries Wal-Mart can't conquer
The world's largest retailer is missing out on some of the biggest global markets, including Germany, Russia and South Korea.
Wal-Mart (WMT) is the biggest retailer in the world, with sales of $135 billion in 26 countries outside the U.S. But it doesn't have stores in some of the world's biggest markets. Not in Germany, not in South Korea, not in Russia. And as of last week, not in India, either.
On Oct. 9, Wal-Mart announced that it is breaking up with its Indian partner, Bharti Enterprises, which means the American company's ambitious plans to open hundreds of supercenters around India won't be realized soon. In the official statement, Scott Price, head of Wal-Mart Asia, referred obliquely to "investment conditions" as part of the problem.
He had been more direct in an Associated Press interview two days earlier at the Asia-Pacific Economic Cooperation summit. Price said that the Indian government's requirement that foreign retailers source 30 percent of the products they sell from small and medium-sized Indian businesses is the "critical stumbling block." Wal-Mart does have a wholesale business in India, which it is keeping.
Price didn't mention that the Indian government is investigating allegations that Wal-Mart violated rules governing foreign investment in the retail industry, or that Wal-Mart is conducting an internal probe on possible violations of U.S. anti-corruption laws.
Wal-Mart has not figured out a way to enter Russia, either. For nearly six years, it looked to buy a local company that could ease potential cultural and bureaucratic misunderstandings. Wal-Mart lost a bid for a promising partner, a discount chain called Kopeyka, in 2010. Wal-Mart later closed its Moscow office after saying disagreements on price had thwarted its acquisition plans.
Then there's Germany and South Korea. After opening stores in both countries, Wal-Mart closed them in 2006. Germans didn't like Wal-Mart employees handling their groceries at the check-out line. Male customers thought the smiling clerks were flirting. And many Europeans prefer to shop daily at local markets. In South Korea, Wal-Mart also stuck to its American marketing strategies, concentrating on everything from electronics to clothing and not what South Koreans go to big markets for: food and beverages.
Over the summer there were rumors that Wal-Mart was interested in purchasing the Hong Kong chain, ParknShop. In the company's most recent media call (PDF), on August 15, Doug McMillon, head of Wal-Mart International, wouldn't comment on that.
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If the Americans who hate Wal-Mart would quit shopping there Wal-Mart would close it's doors in the U.S. Germans demand quality, right there Wal-Mart was a bad fit. In the U.S. folks buy by price at expense of quality and are unwilling to admit it.
gee! I wonder what Wal-Mart is selling in those 500 stores in China! For sure not made in USA stuff, since we-re dooped by their retailers to buy inferior products from China purposely designed to be cheap, so Wal-Mart owners could line their pockets! I wonder when the richest will decide they are rich enough .And not turn the world upside down , just to line their pockets. Soon they will have political representation, if they don't have it yet!. What about us , regular people, when will it be our turn to be represented????
All of you commenters crack me up. I'll bet less than 10% of you put your money where your mouths are and do not shop at Walmart.
People need to quit complaining about the products that Wal-Mart sells. Their products come from the same places as the majority of retailers get their products. Example: Black & Decker products are made in China and are not a Wal-Mart exclusive. Same could be said for most of the Name Brand product being sold by all retailers. That might include the generic/store brands as well. Same company manufacturing products, including name brands, with different labels/branding for different stores.
No if you are talking about poor stocking, poor customer service, low wages, company policies, then you have something valid to complain about.
Typical Americans who want HIGH wages but are not willing to pay the resulting high prices.
The problem with India is the sanctions and fines imposed against Wal-Mart for trying to circumvent government regulations on how they evaluate and select non-domestic companies to operate within their country.
I just wish more countries would wise up like India to the backroom dealings Wal-Mart perpetrates.
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