I. What challenges and setbacks has Wal-Mart encountered to-date in China?
II. What are some of the primary differences between the U.S. e-commerce market and the
Chinese market? Identify at least three.
III. What can be some Do’s and Don’ts for online retailers who are trying to pursuit the
Chinese market? Name at least three of Do’s and Don’ts.
1) One of the largest challenges is competing with China’s largest e-commerce company,
Alibaba, which commanded more than half of China’s $46 billion online
business-to-consumer market in the second quarter, while Yihaodian, Wal-Mart’s online
arm in China had just 1.4% of that market. Walmart’s goal is to achieve the growth that has
so far eluded the world’s biggest retailer in China’s brick-and-mortar retail market.
Another challenge was Wal-Marts shift to focus on e-commerce since historically it had
based its overseas strategy on trying to replicate the success it had with discount stores at
home. Though the company initially was slow to adopt ecommerce, it has now overcome
this challenge, becoming the fourth-largest U.S.-based online seller with more than $10
billion in global sales.
Getting China right is a big priority for Wal-Mart. Regarding physical stores, the
company’s international operations account for nearly 30% of its total revenue and have
posted regular growth in same-store sales, something that hasn’t happened in the U.S. since
2012. China, however, is a weak spot. Out of Wal-Mart’s five foreign markets with more
than $10 billion in sales –Mexico, China, the U.K., Brazil and Canada– only China
reported a drop in comparable-store sales in the quarter that ended July 31. The metric was
down 1.6% as the company continues to struggle with food-safety issues and government
regulations in China.
Lastly, the market is getting tougher, as rivals start to join on the online-grocery business
band-wagon that Yihaodian pioneered.