Walmart in the Chinese Market

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Nov 24, 2024

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Walmart in the Chinese Market Entry strategy Walmart entered the Chinese market in 1996, establishing its first shop at Shenzhen. Walmart has been able to maintain its market entry strategy throughout the years and this has been influenced by three factors. First, Walmart ensures that it sources locally for the products it offers to their customers. Sourcing for products locally helps Walmart to cut cost associated to importation, thus able to keep their prices low (Wiltshire, 2021). Sustainable development is another factor that is an entry strategy for Walmart. In 2018, Walmart built its first environmentally friendly store which helped them to save 40% of the energy they were using. The third factor is online presence in the Chinese market. Given that more people are shifting to online shopping, this factor have made Walmart to tap to the potential of the online customers, hence being successful. Market expansion strategy and global business strategy Walmart continues to expand their operations in China and globally. In 2021, Walmart announced its plan for the next five to seven years was to open more than 500 new stores and warehouses in China. This can be attributed to Walmart sales growth in China, which saw the company realize 6.3% increase. Walmart expansion is aimed at reaching the low tier customers, hence increasing the sales of fresh groceries. Walmart is aiming to have at least 40 new stores each year in the second and third tier cities in China (Badiane & Xiaodan, 2019). Globally, the company has 11,200 stores which are located within 27 countries. International marketing- Targeting, Positioning, and Product strategy

Walmart Target strategy : Demographic and psychographic segmentation are the targeting strategies that Walmart uses. The company understands the psyche of the customers hence knowing that all that the consumer wants is goods of high quality with low price. Thus, Every Day Low Price strategy to their customers. Walmart Positioning strategy : The company position strategy is low price and satisfied customers services. Low price is achieved through local sourcing which contribute to 95%, while satisfied customer services are stressed through friendly services, good shopping experience, and quality goods. Walmart Product strategy : Walmart strive to provide quality products to their customers. Due to their “Every Day Low Prices”, products are priced in a competitive way which give them competitive advantage compared to their competitors (Pandey et al., 2021). International Marketing - Pricing, Place and Promotion strategy. Walmart Pricing strategy : Walmart pricing strategy is determined by bulk sales which allows them to maximize their sales instead of overpricing products. Through their procurement department, bargaining is done to ensure that the cost of supply chain is low, thus able to keep pricing low. Walmart Place strategy : Walmart locate their stores in urban set up where there is dense population (Pandey et al., 2021). This is done to maximize their market reach as well as accessibility for their customers. Walmart Promotion strategy : Due to their nature of procuring products in large quantities, they benefit from the economies of scale. This makes them to offer on their products, thus becoming competitive than other retailers.

References Badiane, K., & Xiaodan, F. (2019). Strategic Analysis and Competitive Sustainability of Hypermarkets in China: Wal-Mart versus RT-Mart. British Journal of Economics , 16 , 2. Pandey, R., Dillip, D., Jayant, J., Vashishth, K., Nikhil, N., Qi, T. J., ... & Qhi, L. Y. (2021). Factors Influencing Organization Success: A Case Study of Walmart. International journal of Tourism and hospitality in Asia Pasific (IJTHAP) , 4 (2), 112-123. Wiltshire, J. C. (2021). Walmart Supercenters and Monopsony Power: How a Large, Low-Wage Employer Impacts Local Labor Markets. Job market paper .

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