Chen Yaochang: How Did WAL-MART Make The World'S First?

This is indeed a proud "first".

In 1996, WAL-MART entered China and chose Shenzhen in an eyesight. It opened the first WAL-MART shopping plaza and Sam member store in Shenzhen.

15 years later, Shenzhen gave back to WAL-MART a miracle.

The creation of miracles is inseparable from the helmsman WAL-MART China.

Recently, Chen Yaochang, President and chief executive officer of WAL-MART China, accepted reporters.

This little business card reflects the distinctive concept of WAL-MART.

As the first local CEO of WAL-MART China, after the helm company, he made great efforts to reform and innovate, not only visionary opening WAL-MART's "localization" journey, but also carrying out the "sustainable development" supply chain in China with great vigour, and promoting the environmental protection low-carbon pformation and upgrading with Guang Dazhong suppliers, showing a sense of social responsibility of a world's top 500 enterprises.

In the 15 year, WAL-MART China started from zero to the first place in a single store.

Talking about why 15 years can create miracles, Chen Yaochang said: I think, WAL-MART and Shenzhen, this young city, has a "pioneer" spirit.

Sam's member stores in Qiao Xiang Road, Shenzhen, ranked first among WAL-MART's more than 9000 global stores.

"Localization" strategy creates the "world first"

Reporter: first of all, I congratulate WAL-MART on being once again the top of the top 500. In July 8th, the Shenzhen Commercial Daily made a big picture in the prominent position of the front page.

From the first WAL-MART shopping plaza and Sam member store in China to more than 340 shopping malls in 1996 for 15 years, WAL-MART has a leaping development in China both in terms of quantity and quality. How is this span accomplished? Are you satisfied with the development of WAL-MART in China?

Chen: I think WAL-MART China and Shenzhen, like this young city, have a "pioneering ox" spirit.

China has now become one of WAL-MART's most important strategic markets in the world.

The global board of directors, the global summit on human resources and the international analyst conference just held in Shenzhen have made China the focus of WAL-MART's global attention.

We have opened more than 340 shopping malls in 127 cities in 21 provinces and created over 95 thousand jobs in China.

More than 99.9% of our employees come from China, and 100% of the general manager of shopping malls are made up of Chinese talents. They know best what Chinese customers need, and over 95% of WAL-MART's products are purchased locally.

I am very proud of having an excellent management team.

China's retail market has huge room for development. There will be a large number of emerging cities and middle class consumers in the future. This is a very good opportunity for us to develop.

Reporter: we have noticed that WAL-MART has made some adjustments to senior management recently. What is the layout consideration?

Chen: WAL-MART China has entered a new 15 year development course.

How to better integrate WAL-MART's global advanced experience with China's local advantages is the key to creating our future competitiveness.

I am very excited about the newly appointed senior management from the WAL-MART global system, including talent redeployment, external recruitment and local talent promotion.

The combination of internationalized talents and local elite teams brings the upgrading of Chinese management team. They have a diversified background, proficient in business, and a deep understanding of WAL-MART culture and customers. These will help us further strengthen WAL-MART's market position in China's retail industry.

Reporter: we heard that several of the top executives recently appointed are women. It seems that WAL-MART pays special attention to the training and development of female employees. Why?

Chen: at present, the number of Chinese female employees in WAL-MART is over 60%, about 40% of the management team is female, and 80% of our customers are women, and female employees can better serve our customers.

We set up the "WAL-MART China women leadership development committee". Every year, the women leadership summit is held. The development of women is one of the global social focuses. It is also the focus of WAL-MART's future global attention, and is one of the key points in multicultural construction of the company.

Du Limin, who was appointed Vice President of operations for Sam this year, is the first employee of Sam's member store. Zhong Shidan, regional senior operation director, joined the company as an ordinary salesperson.

In the management of the company, there are quite a lot of talented people in China from the very beginning.

The retail industry is a "people-oriented" industry.

Reporter: we noticed that in recent years, WAL-MART has accumulated a lot of business and has developed rapidly.

As the head of the world's top 500, WAL-MART's localization strategy is particularly noticeable. Although we are not familiar with localization strategy, it is not easy to really do it.

Chen: WAL-MART's 15 years of development in China is a very pleasant process of localization.

We often say that WAL-MART is actually a Chinese corporate citizen in China.

More than 99.9% of our employees are Chinese employees. They know the needs of Chinese consumers best. They know the development and changes of the Chinese market best.

We have established partnerships with nearly 2 local suppliers, and over 95% of our products are sold locally.

We have studied the development priorities of the central and provincial cities and counties to fulfill our corporate social responsibility in helping people's livelihood and socio-economic development and sustainable development in line with China's "12th Five-Year plan" priorities.

For example, cooperate with the Ministry of Commerce, the Ministry of agriculture and the local governments at all levels to promote agricultural super docking, help export enterprises expand domestic sales, cooperate with the Ministry of science and technology to improve the energy efficiency of suppliers, and cooperate with the Ministry of environmental protection in formulating standards for environmental protection shopping malls.

In addition, through community activities, we shoulder corporate social responsibility and win the respect and trust of community customers.

We have always been committed to actively exploring China's consumer market and urban characteristics, linking our growth goals with urban development goals.

Provide diversified shopping choices for consumers

Reporter: localization should provide different shopping malls according to the consumption habits and needs of consumers everywhere. Can you talk about the development strategy of WAL-MART China?

Chen: different cities have different consumption needs. Even in the same city, there are different consumer groups.

We attach great importance to the diversification of brand and format, so as to provide diversified shopping choices for different consumers.

WAL-MART shopping plaza is the main form of business, providing customers with one-stop shopping experience and rich and competitive products. There are now more than 200 stores.

At the same time, we have a Sam store with a membership based warehouse operation, a smaller community, a more convenient service for the customers, and a DiscountCompact Hyper for the emerging cities.

We will constantly improve and adjust our brand and format distribution according to market development, consumer demand and consumer feedback.

Reporter: we have also noticed the new format of "mid size supermarket", and the details of the changes in some shopping malls, such as the new model store in hypermarket. Why is there such a change? Is it aimed at meeting new customer needs and market challenges?

Chen: as the market is changing, we need to focus not only on consumption trends, but also on the foresight and consumption demand.

We constantly understand the needs of customers in different parts of China, and provide them with the products and services to meet their needs in time.

In recent years, we have noticed that new cities and two or three line cities have a great demand for brand goods, and we have medium - sized supermarkets according to local conditions.

Compared with the WAL-MART shopping plaza, the area is smaller, more flexible, and more easy to go into the community, providing more convenient shopping experience for consumers.

The shop decoration is relatively simple, using the LED lighting energy saving measures, will save the savings into a cheaper price return to the consumer.

Last year, we launched the first Hypermarket New ProtoStore in Beijing. Its shopping mall design, display of goods, types of goods and customer service were all taken into account in order to let customers have a better shopping experience.

We recombine the connectivity of commodity types, such as putting cosmetics, baby products and women's clothing goods in the same area, putting men's clothing, electrical appliances and electronic products together.

In the baking area, the smell of the bread will float out of the special pipe, causing the appetite.

In green fresh areas, there is a machine that spits out recipes to help young people who lack cooking experience.

At the same time, the use of LED energy-saving lamps as ordinary lighting; the installation of inductor freezer, only when people come near, the lights will be turned on, it is an environmental protection and energy saving shopping mall.

This is the future development direction of the hypermarket format. We will introduce more shopping malls that focus more on "customer experience".

WAL-MART attaches great importance to consumer demand, always trying to find customers' consumption habits and exploring new consumer demand.

No matter how innovative strategies we have in the future, we will continue to implement them in detail and eventually return to consumer demand.

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"Sustainable supply chain" guarantees quality and low price.

Reporter: now, people are paying more and more attention to food safety. How does WAL-MART ensure that the food sold is safe and reliable?

Chen: whenever I talk with customers, I ask them why they would choose to shop at WAL-MART. Their answers are always the same. They are "reassurance". This is also our belief that the most important thing is "customer trust", which makes us pay attention to food safety, attach importance to business integrity and attach importance to improving service and management to serve customers.

We have set up a food safety rapid testing center in Shenzhen, Beijing and Chengdu respectively. In the future, more testing centers will be set up to strengthen food safety supervision.

At the same time, through the agricultural super docking project, we will control the source and provide Chinese consumers with high quality and safe products.

Reporter: referring to the agricultural super docking, I know that WAL-MART was first selected by the China Chain Store Association for the first time.

Why is WAL-MART's farm products more secure, fresh and affordable?

Chen: WAL-MART China began its attempt to farm super docking project in 2007, and signed a memorandum of understanding with the Ministry of Commerce and the Ministry of agriculture in 2009.

Through technical training, we teach farmers' friends to cultivate scientifically and organically, improve the quality of agricultural products and reduce the environmental impact.

At the same time, we can trace back to the production, processing, planting and breeding process and daily production status, effectively ensuring product quality from the source.

Finally, direct procurement can reduce the intermediate links, ensure the farmers' income, and provide more benefits to customers, and ultimately achieve the win-win situation of environment, customers and farmers.

We have established 67 agricultural super docking bases in 19 provinces and cities in China, benefiting more than 760 thousand farmers.

Our goal is to drive 2 million farmers to benefit by the end of 2015, and upgrade 15% of the products from green food certification to organic food certification.

Reporter: in this way, it not only safeguards the interests of consumers, but also helps suppliers and local economies to win at a stroke. Is this the secret of WAL-MART's good relationship with suppliers over the years?

Chen: we have been awarded "supplier satisfaction chain enterprises" for 7 consecutive years in the supplier satisfaction survey report released in Shanghai business.

Many suppliers have been developing and expanding the market through cooperation with WAL-MART.

WAL-MART always manages to purchase locally in China and sells more than 95% local products.

The supplier trusts us and knows that cooperation with WAL-MART is sure to develop if goods are good.

In recent years, we have also worked with suppliers to practice the concept of sustainable development. We hope that we can improve energy efficiency and reduce costs together, and provide consumers with more affordable products and better services to win more consumers' hearts.

Reporter: you mentioned the establishment of a sustainable supply chain.

I know that some enterprises feel that the "sustainable development" approach may affect short-term profits.

How did WAL-MART persuade suppliers to carry out "sustainable development" together?

Chen: let me give you an example. For the packaging of an enterprise, we know that there is a new technology that can reduce packaging, but it will not reduce capacity. So this new technology is introduced to this enterprise and promoted in the store.

We achieved a triple win: enterprises reduce costs, consumers get tangible benefits, and society also reduces consumption.

Beginning in 2005, WAL-MART regards sustainable development as its most important mission in the world. It has formulated the strategy of "sustainable development 360" and has begun to work for three major goals, including one hundred percent: the use of renewable energy; "zero" waste; and the sale of goods conducive to resources and environment.

As a responsible company, we choose to do something right.

The supplier trusts WAL-MART. We emphasize the vision and necessity of implementing sustainable development for our supplier partners to drive them together "sustainable development".

For example, since 2008, WAL-MART has held environmental protection packaging and related training every year. More and more suppliers have been inspired to simplify packaging and reduce energy consumption in production, pportation and waste disposal. Ultimately, they not only reduce costs, but also reduce environmental burdens.

In this way, they are willing to cooperate with WAL-MART for sustainable development.

In China, we build environmentally-friendly and energy-efficient shopping malls, sell environmentally friendly products, and build the world's leading high value sustainable development supply chain.

These are in line with the Chinese government's goals in terms of environment, society and energy.

Reporter: now consumers are increasingly demanding for businesses. They will also see whether an enterprise has fulfilled its due social responsibilities.

What do you think of this?

Chen: the enterprise is also a citizen.

A company must be moral, emotional and responsible.

Our global president and CEO have proposed that one of the four directions of the next generation of WAL-MART is to become a leader in solving social problems and make people live better.

We pay special attention to environmental sustainable development, giving back to communities, caring for women, supporting education, nutrition and health, and helping disaster areas.

In April this year, WAL-MART earth Month activities helped the mall and community save electricity by nearly 500 thousand kwh.

In May, the national development and Reform Commission jointly launched the "plastic limit order 3rd anniversary" publicity campaign. In the past three years, the average number of WAL-MART stores has decreased by nearly 90%.

Some time ago, in response to the problem of farmers selling vegetables in some areas, we cooperated with the Ministry of Commerce and local governments in the more than 10 provinces and cities such as Beijing, Hangzhou, Guangzhou and Xiamen to cooperate with the government in purchasing more than 480 tons of unsalable vegetables with love, and launched them at various shopping malls in the country with a low "love price", helping farmers to solve urgent problems, and at the same time allowing customers to buy cheap vegetables at ease.

Since its entry into China, WAL-MART has donated about 65 million yuan of funds and articles to various charitable causes throughout the country, and WAL-MART Chinese employees have accumulated 200 thousand hours in public welfare undertakings.

Not long ago, we also received a special award of 2011 corporate social responsibility from several agencies.

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Capture and cater for the emerging trend of shopping and consumption

Reporter: Recently, WAL-MART has a series of actions in the field of e-commerce in China.

For example, Sam's online shopping malls have been extended to the cooperation of Beijing, WAL-MART and shop No. 1.

What is the development strategy of WAL-MART's e-commerce in China?

Chen: the scale of online shopping in China has increased rapidly in recent years.

In the next few years, it will be close to the sales level of the US online shopping market.

As a useful supplement to the physical shopping malls, we launched the Sam online shopping service in Shenzhen and got very positive feedback from customers. Because we have abundant varieties and timely delivery, we have just extended this service to Beijing.

WAL-MART has been committed to providing high quality services to customers through diversified formats and forms of business.

We attach great importance to the development of e-commerce.

In order to better meet the demand of online shopping in China's fast-growing market, we have been committed to the development and research of e-commerce platform, hoping to provide an international first-rate online shopping experience for Chinese customers in the future.

Reporter: at present, China's e-commerce market is booming. There are different types of online shopping services including group buying.

What do you think is the advantage of WAL-MART's e-commerce in China?

Chen: we have a competitive edge in the field of e-commerce, because we are multi-channel retailers, and we can take advantage of our physical stores.

WAL-MART's strong brand is also a competitive advantage. We have nearly 50 years of retail experience and customer trust.

Another source of competitive advantage is our influence and logistics strength as the world's largest retailer in global sourcing.

Finally, we have the successful experience of operating multi-channel business in many international markets. We can use these experiences to understand and grasp the Chinese market quickly.

Reporter: besides e-commerce, what other emerging consumer trends do you think China has?

Chen: Chinese consumers are becoming more and more smart.

Typical Chinese families regard precautionary savings as necessary. Although they have begun to increase their consumption, their concern for cost and value is increasing.

No matter what the level of income is, they tend to buy products with higher cost performance.

The increasing number of retail brands enriches consumers' choice.

Besides price, consumers have higher requirements for location, quality, safety and freshness, shopping environment, customer service and environmental sustainability of products.

The acceleration of China's urbanization process and the rapid growth of the middle class also make China's retail industry face unprecedented opportunities for development.

Reporter: How did WAL-MART capture and cater to these emerging consumer trends?

Chen: we stick to the local consumers who are close to China to distinguish consumers' expectations and needs from different ages and regions.

Including the "new model store" that I talked about before, and the agricultural supermarket docking project are the best examples of WAL-MART's continuous demand to satisfy customers' consumption needs.

In addition, giving back to the community and sustainable development is the essence of WAL-MART's corporate social responsibility.

We attach great importance to the sustainable development of business, because we clearly realize that it can help us reduce costs, provide consumers with more environmentally friendly products and create more value.

15th anniversary will be a new starting point.

Reporter: 15th anniversary, it is an age of great popularity. What kind of scale is WAL-MART going to do in China in the future?

Chen: for WAL-MART, China is an important market with potential for development.

Over the years, we have maintained steady growth.

In 2009 and 2010, all of the new stores grew at the rate of about 50 new stores, and most of the new stores went deep into the two or three and four tier cities.

We are full of confidence in the Chinese market and will continue to maintain this growth momentum.

15th anniversary, for us, it is more like a new starting point. With previous accumulation, we can run more steadily and freely.

Reporter: tell me about your expectations for the future.

Chen: WAL-MART has been committed to saving customers and making them live better.

When we open a shopping mall in China, we will introduce advanced retail technology and innovative retail concept to help local retail businesses improve their business and service quality, support local manufacturing industries and provide more job opportunities, thus contributing to the common prosperity of the local economy.

My expectation for the future is very simple, that is to be steadfast and focused on opening up every shop. Employees can work happily, serve every customer well, and care for our community better.

Ed Chan

Chen Yaochang joined WAL-MART store in 2006, and became president and chief executive officer of WAL-MART in February 2007. He is responsible for the retail business of the company and is one of the organizers of WAL-MART zero carbon action.

In August 2010, Chen Yaochang was awarded the "ten outstanding contribution figures of Hunan Award" awarded by the Hunan provincial development and Reform Commission and Hunan provincial chamber of Commerce, and was awarded the "leader of pnational corporations in Shenzhen for 30 years" by the association of foreign investment enterprises in Shenzhen. In March 2009, Chen Yaochang was selected by the Global Entrepreneur magazine to "promote 25 Chinese business internationalization". In November 2008, Chen Yaochang was awarded the "CCFA2008 China chain annual figure" by the China Chain Store Association. In August 2008, Chen Yaochang was awarded the title of "the most socially responsible entrepreneur" in the China best employer selection co sponsored by the China International Human Resources Association and the Peking University Business Review. The Wal-Mart Store Inc also won the "best employer in 2008" in the selection.

Because led WAL-MART China to pursue the strategy of sustainable development, in December 2009, Chen Yaochang, as the "12 year" low carbon economic figure of "the 2009 figure", was honored with the Chinese version of Forbes. In January 2010, Chen was honored by the China Guanghua Science and technology foundation green harmony fund and the 100 people's Federation for "Guanghua thousand jade award green contribution".

Under the leadership of Chen Yaochang, WAL-MART China was awarded the "2011 most influential enterprises in China's economy" and "the ten leading green companies in the world". It won the "2011 corporate social responsibility special award", "JINGWAH public welfare award 2010 Best Corporate Social Responsibility Contribution Award", "2009 Best Corporate public image award", "China's public welfare Brand Award" and "China Women's Charity Award".

WAL-MART brand has been selected as the top 100 list of Chinese brands and the top 10 outstanding foreign brands in the past 60 years, and has won the "2010 low carbon China leading brand".

Before joining WAL-MART, Chen Yaochang served as director of Milk Group North Asia region and director of milk Management Service Co., Ltd., responsible for the retail business of the group in mainland China, Hongkong, Taiwan and South Korea.

Chen Yaochang has been holding the post since November 2001.

Previously, he was the chief executive officer of the Taiwan District of Hui Kang supermarket.

Prior to joining the milk group, Chen Yaochang worked for BMG recording company under the Bertelsmann group. He started working as an enterprise development manager in New York, USA in 1989. Later, he was appointed managing director of BMG in Taiwan, and was promoted to managing director of BMG Hongkong and Mainland China.

Chen Yaochang began his career with McKinsey Co analyst.

Chen Yaochang has a bachelor's degree from University of Chicago and a master's degree in Sloan Management School, Massachusetts Institute of Technology.

Chen Yaochang is a long-term member of the consumer products Forum (CGF, formerly known as CIES) summit Committee.

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Surprise: not in the United States, nor in other developed countries, but in Shenzhen, Sam's member shop in Qiao Xiang Road, Shenzhen.

Footprints of WAL-MART

In 1962, Sam Walton Create Company opened the first WAL-MART department store in Rodgers City, Arkansas.

In 1970, the company headquarters and the first distribution center were set up in Benton Ville, Arkansas.

In 1975, Sam Walton, inspired by Korean workers, introduced the famous WAL-MART cheering.

In 1984, Sam Walton made a promise to his employees that the company's pre tax profit reached 8%. He jumped up the hula dance in Wall Street.

In 1990, WAL-MART became the largest retailer in the United States.

In 1996, when he entered China, he opened the first WAL-MART shopping plaza and Sam member store in Shenzhen, and set up the first distribution center in Shenzhen.

2000s

In 2002, for the first time in the world, Fortune magazine published the top 500 top companies in the world and ranked first among Fortune's most respected companies.

In 2002, the global procurement office was established in Shenzhen.

In 2007, we began the attempt and exploration of "agricultural super docking" project.

In February 1, 2007, the "environmental protection 360" project was announced, which aims to extend environmental protection from a simple reduction of the company's environmental damage to the participation of employees, suppliers, communities and customers.

In February 27, 2007, WAL-MART department store Limited announced the purchase of a 35% stake in the trust Mart Company.

In October 22, 2008, the global summit on sustainable development was held in Beijing. It proposed to establish a global supply chain responsible for environmental and social development, and will work with 200 top suppliers in China to increase energy efficiency by 20% by 2012.

In October 28, 2009, WAL-MART China and the Ministry of Commerce and the Ministry of agriculture respectively signed a memorandum of understanding to promote the "agricultural super docking" to promote the successful experience of "agricultural super docking" project.

In 2009, Chen Yaochang was selected as the "low carbon economy figure of 2009" by the Chinese version of Forbes.

2010s

In February 25, 2010, the announcement of greenhouse gas emission reduction targets will cut 20 million tons of greenhouse gas emissions from its global supply chain by the end of 2015, equivalent to a reduction of over 3 million 800 thousand vehicle emissions from the highway in one year.

In October 2010, WAL-MART announced its global sustainable agricultural development goal. WAL-MART China subsequently released the new target of agricultural super docking, that is, by the end of 2015, 2 million farmers had benefited, and 15% of fresh food waste had been reduced. Meanwhile, 15% of the agricultural and super docking products had been upgraded from green food certification to organic food certification.

In November 16, 2010, the global board of directors was held in Beijing.

This is the second time since the convening of the board of directors in Shenzhen in 2004 that the selection of a board of directors in China has highlighted WAL-MART's strong confidence in the Chinese market and its long-term investment in this rapidly developing emerging market.

In November 2010, Sam launched the first online shopping service in Shenzhen.

In March 31, 2011, the first Asian investor conference was held at Shenzhen headquarters, WAL-MART department store. It introduced WAL-MART's development in China and other Asian markets to analysts and investors, as well as WAL-MART's long-term development plan for the Chinese market.

In May 13, 2011, WAL-MART department store Limited announced that it had reached an agreement on a minority stake in China's 1 e-commerce holding company.

In June 27, 2011, signed a memorandum of understanding on the development of WAL-MART's e-commerce cooperation framework with Shanghai Business Council, and formally announced the establishment of WAL-MART global headquarters in Shanghai.

This marks the start of WAL-MART's e-commerce tour in the Chinese market.