Is WAL-MART Global Closed To China?

Recently, WAL-MART announced that it had closed 269 stores worldwide, including 154 in the United States and 60 in Brazil, involving 16 thousand employees.

But on the other side of the ocean, China unexpectedly showed a scene of "prosperity": WAL-MART claimed that instead of closing the store, it had to dig deep into China's two or three line market and open 13 new stores within two months.

In addition, WAL-MART China will launch a shopping mall in 2016, promote its own brand, and improve the direct purchase of imported goods.

Is the situation really great? Reporters think WAL-MART

The new strategy of "package" looks very beautiful, but most of them are flowery and embroidered legs, which can tell stories to investors, but it is not easy to reverse the current decline.

Take the strategy of "deep plough two or three line market" as an example, in the past more than 10 years, WAL-MART has not achieved very good results in its first tier cities, but in the two or three line market with larger regional differences, it is difficult to exert its scale effect and supply chain advantage.

In order to illustrate this topic well, we collected the relevant data of WAL-MART, Carrefour, and three big store giants from 2005 to 2014 for comparative analysis (data from China Chain Store Association).

According to statistics, in the past 2015, only 10 new stores were added to WAL-MART, and 31 new stores were opened by big RFA, and 62 stores were opened in Yonghui supermarket.

For WAL-MART, the gap between the first and the big RFA is further increased, and later Yonghui is eyeing and pressing with each other.

1, reflecting on the past, traditional advantages are gradually losing. Why is WAL-MART's new strategy like a scratch? It is believed that the real problem of WAL-MART lies in the fact that traditional advantages are being lost, or have not been played at all.

Excellent supply chain has not brought outstanding performance. WAL-MART's highly effective and rigorous supply chain has been praised by the industry.

From the access mechanism, suppliers need to pass a series of testing and certification by WAL-MART.

In the distribution process, in 2015, WAL-MART already had 9 dry warehouse distribution centers and 11 fresh food distribution centers, and 85% of the non fresh products were distributed through the logistics distribution center, and about 50% of fresh products were distributed through fresh logistics distribution centers.

At the source, WAL-MART is directly cooperating with manufacturers or farmers.

But even under the severe supply chain guarantee, WAL-MART still has such food safety incidents as exploded sales of "donkey meat" including "Fox meat".

In some second tier stores in WAL-MART, its strong supply chain can not guarantee its commodity advantage.

Losing the aura of "daily parity" and "daily parity" is one of the core values of WAL-MART, helping it invincible in the United States.

However, in China, "daily parity" suffered heavy losses from Chinese style prices.

Take fresh food as an example, fresh low price can best become a tipping point, but WAL-MART has never been able to occupy customers' minds in fresh prices.

In contrast, Yonghui's distinctive operation in fresh areas has quickly become its iconic category.

Both WAL-MART and Yonghui are directly sourcing from the source, and the procurement scale and supply chain technology of WAL-MART can theoretically achieve lower prices and better quality, but the opposite is true.

In addition, the rise of some small formats and exclusive stores has made WAL-MART's "parity" image fade away.

In 2015, WAL-MART invested more than 370 million yuan for upgrading and upgrading over 50 stores nationwide.

But the effect of pformation and upgrading is still unknown.

The author believes that in terms of WAL-MART's volume and its rigid management mechanism, this mechanism determines that its store pformation and upgrading can not achieve significant results.

2, looking forward to the future, the pformation lacks the "central idea". As the beginning of this article, WAL-MART throws out a new package of strategies, including the two or three line market of deep tillage.

Instead of focusing on one point, it is a comprehensive attack, which makes the upgrading and pformation of China's market lack of main ideas. Not only do the outside world do not understand it, but even WAL-MART itself is faced with a plight of weak execution.

WAL-MART, which is not optimistic about the two or three line market, has announced the two or three line market. But the city where its new shop is located, such as Heyuan, Guangdong, Guizhou Bijie, Yunnan Lijiang, and so on, is more like three or four line cities.

For WAL-MART, which relies on scale effect, supply chain capability and store management, the three or four tier cities are more unfavorable to their advantages.

In fact, the competition in the three or four tier market is also fierce, and local bigwigs become their main competitors.

For example, there are supermarkets in Heyuan, Guangdong, such as people's happiness, Guang Bai supermarket and Century Lianhua supermarket. Guizhou Bijie has joint efforts, Baihui and other supermarkets.

Because local supermarkets are more flexible in operation, less investment in construction and low in labor costs, cash in the market can get lower prices. WAL-MART, who is good at positional warfare, may be planted in these "street battles".

In 2015, when the Amazon was still exploring the electricity supplier, Amazon amazed the world when its market value exceeded US $230 billion 500 million at US $246 billion 500 million.

In fact, Amazon's sales are only $about 90000000000!

In China, in 2015, WAL-MART has already started its own online shopping business, and will start cross-border electric business in China. But it is two concepts to be optimistic about e-commerce and good business. Today, WAL-MART also falls behind. CEO, Huang Ming Tai, said that the window period of retail business has passed. WAL-MART may not believe this evil, but how long will the market give WAL-MART?

The founder of shop No. 1 has just talked about four misunderstandings when she first shared the experience of an electricity supplier in 2012. First, as long as there is traffic, there will be sales; two, a good offline retailer can also do well; three, as long as a key point is reached, customer experience is good; four, as long as the scale is bigger, the cost will naturally drop.

Today, it still has warning significance for WAL-MART and all enterprises that do retail business. Unfortunately, Internet retail revenue will lag behind investment seriously, and the investment in WAL-MART's electricity supplier will continue for a long time.

E-commerce is related to technology, and WAL-MART used to be synonymous with retail technology.

Dong Minglun once said, "WAL-MART is a technology company"! But in the mobile Internet era, WAL-MART can still take the lead? Amazon's real bright spot is its cloud service Amazon Web Service (AWS).

What about "hot potato" shop No. 1? Since WAL-MART controlled 1 shop last year, the WAL-MART electric business platform has become a hard nut to crack.

WAL-MART has also been using its international supply chain to increase the proportion of imported food in shop No. 1.

In 2016, it is more likely to use the platform of shop No. 1 to speed up the integration of the two. As Zhang Shujuan, vice president of public relations in WAL-MART China, said WAL-MART China will continue to increase cooperation with resources 1 and share resources.

But from the O2O practice of some entities in China trying to connect with the electricity supplier, this is undoubtedly a bogus that can not see the way out.

For example, Wangfujing department stores lost tens of millions of dollars in order to make O2O, and the O2O layout of Da Yun FA with the help of flying cattle Network also burned a lot of money; the Jingdong and O2O projects launched by the ten thousand convenience stores did not have the following items; all the lines of the Suning line were opened up, and experienced declining performance, constant adjustment, and industry doubts, which were still in the "protracted war".

Against this background, WAL-MART should expect to make achievements in the integration of shop No. 1, which can be said to be very difficult.

For WAL-MART, there is another difficulty for O2O to launch the electricity industry. China's Internet culture is extensive and profound.

The creation of the Department of Ali, many grassroots businesses to participate in the creation of a variety of gameplay, all kinds of open channels, dark ravines, established rules of the Chinese electricity supplier competition pattern.

From this level, China's Internet application is the world's leading.

This is why some European countries never mention "Internet thinking", because Chinese players are too good at playing.

Therefore, although WAL-MART is the boss of a physical store, it is only a pupil in the electricity business field. It is still very tender compared with those of Tmall and Jingdong. If it is not good enough, it will inevitably fall into the mire of O2O. At present, WAL-MART is at a crossroads. The successful experience or the traditional advantages are difficult to sustain. The new business growth Wa Tsubasamitoyo, coupled with the WAL-MART system, the recognition of the Chinese market, and the insight into the great changes in the industry, will become an important factor affecting its next decision and actions.

Although WAL-MART official has always expressed its interest in China, how much can it do in the Chinese market in the future?