Question

1.. Provide several reasons that Walmart is having challenges meeting Chinese customer expectations and satisfying their needs? (The material below will assist.)

2. What alliances has Walmart embarked on in China to better serve Chinese consumers in the future? (The material below will assist.)

3. Who is the key Walmart competitor in China and what alliances have they formed? (The material below will assist.)

Answer 1

Reasons of Walmart is having challenges meeting Chinese customer expectations and satisfying their needs are stated below:

1.Walmart started its retail operations in 1996 with the opening of a super center and Sam's Club in Shenzhen,China.Since then the business has seen many profits and losses,retaining of old consumers as well as making new consumers and facing competition in the market.

The population of China is extremely disciplined with respect to financial savings and the slogan of Walmart,“saving people money so they can live better” has not persuaded with Chinese consumers necessarily who face no problem saving money on their own.

2.China lacks in social safety net that the Americans enjoy with social security,pensions and many medicare programs.The Chinese are reliant on their children for this support as they grow.With the one child policy,families in china save throughout their life and as they shop they are more attuned to value and quality assurance than low prices

3.In terms of Competitors,Many multinational retailers with large stores also face stiff competition from local businesses who run their smaller convenience stores that cater to neighborhoods within large urban areas in china and though more modern supermarkets are gradually growing in popularity.

4.In China,Middle class families have ample money to spend but on cultural basis they purchase enough food for one or two days at a time only especially buying fresh as they have minimal refrigeration and they often lack cars to transport larger grocery purchases.Most families will shop near their homes and will purchase only what they carry which means more trips and lower overall ticket totals.

Thus,Walmart will likely need to play its global e-commerce wildcard to operate for a longer term in China as the nation gradually transforms into a customer driven economy irrespective of its competitors.

Alliances has Walmart embarked on in China to better serve Chinese consumers in the future:

In the long run,Walmart has improved their internal operations and sees good long term prospects and is working to gain better locations and layouts which are more suited to a super center format. Walmart has approximately 400 stores compared to 4,500 in the United States and while the countries are roughly the same size in land mass,also China has four times the United States of America population and consumers buying potentials.

In February 2007,Walmart expanded its operations in China by purchasing a 35% interest in Trust mart.This company operates 101 hypermarkets in 34 cities in China under the Trust-Mart banner and the investment in Trust mart gave Walmart an opportunity to expand its footprint in China and satisfy the needs of consumers by producing best quality products & services.

During the year 2011,Walmart acquired a majority interest in Trust mart and has become one of the largest foreign-funded supermarket operator in China surpassing the french retailer Carrefour (A french multi national corporation operating in online food supply)

In the coming year,barriers to entry are lowered and other smaller players will have more e-commerce access but for now Walmart has an opportunity to share insights and potentially override its weaknesses they have individually.Walmart is hedging its bet in China and continues to perfect its operations in providing best services to consumers but the company is also jumping feet first into the rapidly growing e-commerce market with Yihaodian (Leader in the grocery and consumable space) in China.

Key competitor of Walmart in China and alliances have they formed:

In China,Walmart faces a stiffer competition in grocery market than it does in the United States where delivery on the same day and self-checkout are table stakes.The toughest key competitor of Walmart is Alibaba which is the largest e-commerce marketplace in China by percentage of total retail e-commerce sales and in terms of alliances is JD.com Incorporation,this company is china’s largest online retailer,biggest overall retailer and country’s biggest Internet company by revenue.

(If you liked the answer please give an Up-vote,this will be quite encouraging for me,thank you !!)