In 1991, Walmart became an international company when
it opened a Sam’s Club near Mexico City. Just two years
later, Walmart International was created. Since venturing
into Mexico in 1991, Walmart International has grown
somewhat erratically. During the 1990s the retailer exported
its big-box, low-price model, an approach the company
expected to be as successful in foreign markets as it was
in the United States. Although Walmart has had success in
several overseas markets, this success has been far from
universal. For example, in Mexico, China, and the U.K.,
the company’s efforts to offer the lowest price to customers backfired because of resistance from established retailers. And in Germany, Walmart could not seem to fit its
model to local tastes and preferences. In Japan, its joint
venture had a series of setbacks, many related to buying
habits for which the Walmart model did not respond well.
In Mexico, three of the largest domestic retailers constructed a joint buying and operational alliance solely to
compete with Walmart.
1
Its presence in Hong Kong ended
after only two years during the 1990s, and it shuttered
operations in Indonesia in the mid-1990s after rioting
incidents in Jakarta. Walmart also owned approximately
16 stores in South Korea and 85 in Germany; however, it
sold off these operations in 2006 after merchandise failed
to match consumer tastes, distribution and re-bagging
problems arose, and strong loyalties to other brands made
attracting customers difficult and expensive.
2
In addition, labor advocates and environmentalists
have created headaches for the U.S. behemoth, making
continued expansion both cumbersome and expensive. For
instance, in 2006, Walmart faced a strong public relations
campaign from the All-China Federation of Trade Unions
(ACFTU) over Walmart’s refusal to let its workers in
China unionize. Walmart was eventually forced to concede, perhaps because the Chinese government also lent
its weight to the ACFTU’s campaign in its effort to establish unions in all foreign-funded enterprises throughout
the country. As of October 2006, almost 6,000 of Walmart
China’s 30,000 employees were union members.
3
Despite
its public battle with the ACFTU, Fortune China and
Watson Wyatt still voted Walmart China as one of the
“Top 10 Best Companies to Work for” in 2005.
4
As
Walmart continues to expand its global operations, analysts are curious to see how the company is received and
whether consumers’ opinions in fragmented market settings are a match with Walmart’s low price model.