Wal-Mart's Expansion In China Won't Be Easy

Summary

Walmart plans to expand its presence in China by building 115 new stores by 2017, increasing its footprint by nearly a third. CEO Doug McMillon emphasized the goal of becoming the most trusted retailer, not necessarily the largest, in China's competitive market. While Walmart faces challenges from e-commerce giant Alibaba and past food safety scandals, the company aims to grow both its brick-and-mortar and online presence. Walmart's strategy mirrors its U.S. approach, focusing on integrating online capabilities with physical stores and upgrading underperforming locations.

Takeaways

• 🏗️ Walmart plans to build 115 new stores in China by 2017, increasing its presence by nearly a third.
• 🌍 Walmart's CEO, Doug McMillon, emphasized that China is a key strategic market for the company.
• 🔑 Walmart aims to become the most trusted retailer in China, not necessarily the biggest.
• 🏢 The new expansion plan focuses on both brick-and-mortar stores and e-commerce growth in China.
• 💻 Walmart already owns a majority stake in Chinese e-commerce platform Yihaodian, which translates to 'Number One Store'.
• 🛒 Walmart is attempting to further integrate its online platform with its physical stores in China.
• 🚧 Walmart faces challenges with food safety scandals and regulatory differences in China compared to the U.S.
• 📉 Despite a 0.7% drop in sales last quarter, Walmart has gained market share in China for eight consecutive quarters.
• 🔄 Walmart plans to close some underperforming stores while remodeling or upgrading 50 others in China.
• 💡 The strategy in China closely mirrors Walmart’s U.S. approach, blending online and physical shopping experiences.

Q & A

What is Walmart's expansion plan in China as of the announcement in the transcript?

Walmart plans to build 115 new stores in China by 2017, increasing its presence in the country by nearly a third.

What was Walmart CEO Doug McMillon's main message during the Beijing press conference?

Doug McMillon emphasized that Walmart's goal in China is not to be the biggest retailer, but to be the most trusted retailer.

Why is Walmart's plan to grow in China considered ambitious?

It is considered ambitious because of China's ultra-competitive retail market, where local e-commerce giant Alibaba is already leading the online shopping race.

How does Walmart's plan in China resemble its strategy in the U.S.?

Walmart's strategy in China includes expanding its online capabilities, which mirrors its U.S. strategy of combining online growth with a strong store experience.

What is Walmart's relationship with the Chinese e-commerce company Yihaodian?

Walmart owns a majority stake in Yihaodian, a Chinese e-commerce company, and plans to further integrate the site with its physical stores.

What challenges has Walmart faced in building trust in China?

Walmart has faced food safety scandals in China, a country with less stringent regulations compared to the U.S. Additionally, the company had to shake up its leadership following an investigation into its financial records and practices.

How has Walmart's market share in China changed despite a recent decline in sales?

Although Walmart's sales in China fell by 0.7% last quarter, the company has gained market share for eight consecutive quarters.

Does Walmart plan to close any stores in China?

Yes, Walmart plans to close some underperforming stores in China as part of its restructuring strategy.

What actions is Walmart taking to improve its existing stores in China?

Walmart intends to remodel or upgrade 50 of its stores in China to enhance their performance and appeal.

Why is food safety a significant issue for Walmart in China?

Food safety is a significant issue for Walmart in China due to past scandals and the country's less strict regulations, which makes it harder to build trust with customers.