Can Wal-mart Succeed In China?

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Recently, Wal-Mart who has been quiet in e-commerce suddenly increased its investment on the Chinese market. First it in May announced to be share holders of e-commerce company No.1 Store, and then again it expanded its Sam's Club Online Shopping Mall from Shenzhen to Beijing. After that Wal-Mart announced to plan to set up China headquarters of the global e-commerce in Shanghai, with overall responsibility for its global e-commerce operations in the Chinese market. The relevant departments in Shanghai signed a memorandum with Wal-Mart fore this.

It is widely believed that these moves showed Wal-Mart's greater determination than before to enter the Chinese e-commerce market. By contrast, Wal-Mart this year takes another major initiatives in the area of e-commerce - the acquisition of Kosmix. It spent $ 55 million. Kosmix is a social media technology provider. Wal-Mart chose to acquire a fashionable social media companies is showing this commitment into e-commerce. In evaluating the behavior of these acquisitions, Wal-Mart CEO said Wal-Mart will continue to increase investment in the global e-commerce field.

Wal-Mart is known for its complete management and procurement of goods, modern information systems, procurement and sales without borders. Almost all of these can be directly transplanted to the e-commerce. But Wal-Mart's e-commerce performance is weak. Among Wal-Mart's $ 400 billion of sales per year, Walmart.com online business only contributed 2 billion, only 0.5% of the whole.

The weak of e-commerce is closely related with Wal-Mart's long-term neglect. Why did Wal-Mart not pay attention? In recent years, its performance has been good. It is a major reason that it has no sense of crisis. Wal-Mart's main product is not suitable for online shopping is another major reason. But now there is a change in circumstances.

With the popularity and the reconstruction of people's spending habits, online retail stores have a impact on the real retail stores. It is rapidly spreading from the original publishing industry, such as the areas of appliances, entertainment and office products. Amazon has discharged many of the old giants and ranked the second. The sales of last year were $ 37.7 billion.

God knows when this spread will be a threat to the survival of Wal-Mart? On July 27, Amazon released the second quarter earnings of fiscal 2011, the revenue increased 51%. Immediately, Amazon's shares rose 6.29%. Its market value is worthy 100 billion U.S. dollars, more than half of Wal-Mart. To enter the Chinese e-commerce market, Wal-Mart also faces a fate-like test.


About the Author:
I am Amanda Xia from everychina.com. http://www.everychina.com/ serves as an important window for "China to understand the world and be understood by the world". It has nine website clusters, including Market,Finance, History, Fact, Travel, Culture,Traditions and Foods.



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