Walmart's Marketing Strategy in China
WAL-MART STORES WITH CHINESE CHARACTERISTICS
Past success will be the future failure.
- Ali Farhoomand, Director, Asia Case Research Centre
It seems ironical the president of Wal-Mart China, CassianChueng resigned just at the beginning when China’s government fully opened its retail market to foreign retailers in 2005; which was considered to be a declaration of failure to fulfill the retail giant’s expectation in China of Chueng. After one decade of operation in China, Wal-Mart has provided continuous negative returns to the headquarter in the US and was ranked only 20 in the top 25 chain stores in China at the end of 2004 according to China Chain …show more content…
Continued focus on the value drivers of price and service is a sensible competitive advantage for Wal-Mart to establish China given the importance of value to the Chinese consumer, and their growing demand for quality and service. However, given the unique consumer behavior of the Chinese consumer such as many trips, little purchase, tendency for impulsive purchases and easily swayed by promotional campaigns, it could consider to offer more frequent promotional campaigns while offering reasonable prices across the board not necessarily the lowest price for all its products compared to its competitors.
Wal-Mart could build a competitive advantage by offering frequent and good value promotional campaigns compared to its competitors. This would attract customers to visit Wal-Mart frequently as opposed to other supermarkets. This could encourage higher frequency of visits to Wal-Mart, and encourage higher spend per visit.
Don’t try to invade the whole Chinese market
Wal-Mart should locate in higher density cities targeting middle class and larger population base. Wal-Mart's US model of serving relatively small populations would be too costly in China (average spend per customer too low). Also, lower income populations tend to purchase more basic necessities. A hypermarket operating model with a broad assortment of products would be too costly to maintain in terms of inventory costs. Therefore, it would be more