The beginning of spring 2005 must have left a mark on the corporate strategy of every retailer
vying for a share in China, the world?s most populous consumer market. From this time on,
foreign retailers were no longer constrained to specified regions, forced to enter into joint
ventures with local partners, or hampered by a lack of distribution rights?China?s retail
market had thawed and was laid open to all.
To the world?s largest retailer, Wal-Mart Stores, China had long been a strategic imperative.
On one hand, nearly US$20 billion worth of goods made in China were now travelling
through Wal-Mart?s global supply chain to drive its costs down; on the other hand, China?s
vast size in land and population, an emerging middle class optimistic and eager to spend, and
consumers? relentless pursuit of value all seemed to suggest that China was an ideal ground
into which Wal-Mart could successfully transport its business model centring around the
strategy of ?Every Day Low Prices? (EDLP).
However, in the midst of proclamations of market entry or ambitious expansion plans by
many major world retailers came the news that Cassian Chueng, the president of Wal-Mart
China, had resigned in March 2005 to spend more time with his family. Changing the
commander-in-chief the night before a major battle was, to many, no different from a public
admission of the failure to live up to the retail giant?s ambition in China. Indeed, nine years
after its market entry in 1996, Wal-Mart ranked only twentieth in sales among all chain stores
in China, compared to the fifth place taken by its world rival, the French Carrefour, which
had entered the market at more or less the same time as itself. Wal-Mart had 43 stores
nationwide, far behind ...