Wal-Mart in fight for China's market
(Crienglish.com)
Updated: 2006-07-26 16:07 It operates 79 stores in 32 Chinese cities compared with 60 locations in 30
cities for Wal-Mart. Last year, Carrefour's sales in China totaled US$2.2
billion, compared with US$1.2 billion for Wal-Mart, according to the Commerce
Ministry in Beijing.
Wal-Mart is accelerating its store openings in China -- it plans to open at
least 18 this year, six more than Carrefour -- and analysts are reluctant to bet
against the Bentonville, Ark.-based discount retailer given its enormous
resources. Its global sales last year reached US$285 billion, triple that of
Carrefour's. Wal-Mart bought US$18 billion in goods from Chinese manufacturers
last year.
But as a retailer in China, Wal-Mart is a small fish. Its strategy of
offering tian tian ping jia, or "everyday low prices," hasn't had a big effect
on Chinese mom-and-pop shops that are used to cutthroat pricing. Wal-Mart has
been unable to replicate its super-efficient logistics system in China largely
because it lacks scale.
Carrefour has more international experience than Wal-Mart. The French company
operates in 29 countries, about double the number for Wal-Mart. Both chains have
struggled in Asia, however, pulling out of countries such as South Korea. And
despite their push in China, Chinese retailers dominate.
The more stores it can open, the better chance Wal-Mart can leverage its mass
scale to squeeze prices lower and drive efficiencies in purchasing, inventory
management and distribution.
(For more biz stories, please visit Industry Updates)
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