Wal-Mart executives were in India recently checking out that country's potential. They were greeted by protesters who are not keen on the idea of Wal-Mart opening stores throughout their country. According to Reuters,
In New Delhi, over 100 demonstrators waving banners and shouting slogans marched on government buildings to protest against the entry of the world's largest retailer into India. Some broke through police barricades and burned an effigy of a dummy with "Wal-Mart Down" scrawled on it. "Go back Wal-Mart," protesters shouted, waving placards saying: "Save Small Retailers."
The shopkeepers in India fear what happened to mom and pop stores in small town America will happen to them. There are an estimated 40 million people in India who depend on small retail shops for their livelihood.
"The earnings for our small store keep me, my younger brother and sister and my parents alive," said Amrit Prakash, 26, one of the protesters, who owns a small grocery store in Delhi.
"If Wal-Mart comes, they will sell goods at wholesale prices which will be cheaper and I will have no customers. I simply can't compete with these big supermarkets ... what will happen to me and my family? I'm worried we'll end up on the streets."
Meanwhile, it was announced this week that Wal-Mart is expanding its holdings in China by agreeing to expand its holdings in Chinese retailer Trust-Mart-- a deal estimated at $1 billion. International success is no guarantee.
"Wal-Mart's efforts to expand outside the US have not proved an unqualified success, raising questions about whether its retail formula can be replicated elsewhere.
The firm pulled out of Germany and South Korea after struggling in those markets, while its Japanese subsidiary Seiyu has made heavy losses."
Entering these markets demands some cultural adjustments. Ikea has had major struggles in China and some experts say the small number of stores indicates that things are not doing well. Maybe yes or Maybe no. Turns out that it's taken Ikea and the Chinese a while to figure out how to work together. In Tim Johnson's blog, China Rises, he shares what it was like to go to an IKEA in China in 2003.
When my family first moved to Beijing in September 2003, we made several trips to the local Ikea store to buy lamps and bedding. We were astonished by what we saw. The store was packed but nobody was buying. They were too busy lounging! In the furniture section, every single chair was taken. Shoppers weren’t trying them out, mind you, but resting. In the mattresses section, shoppers were sprawled all over the beds. My wife swears she saw one couple playing cards on a bed, looking like they had found the most comfortable place in Beijing to spend the afternoon.
We quickly realized that a) the store was air conditioned and offered a respite from the outdoor heat, and b) no employees were there trying to shoo away people camped inside.
Johnson reports IKEA just opened the largest IKEA in the world in Beijing and the store is packed. This time, they are not only lounging, they are buying. Johnson reports the restaurant was packed and the Chinese had plenty of products in their shopping cars.
"I noticed something else: Employees in various sections stood with microphones near portable amplifiers shouting out the benefits of certain products. I bet this doesn’t happen in other countries. Ikea is putting some “Chinese characteristics” into its China strategy."
Image Credit: Gurumustuk's Singh