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.
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.
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.
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.
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.