Business and management
Schumpeter
Retailing in China
Walmart v Wumart
May 18th 2011, 17:08 by The Economist online | BEIJING
A HEAP of raw chickens greets customers at a Wumart store in Beijing, heaped up on a table without packaging or protection against passing sneezers. The shop front is dirty, the decor shabby and the goods inside are displayed without the slightest attention to aesthetics. But the prices are wonderfully low.
China is the fastest-growing big retail market, and may one day be the biggest. Foreign chains such as Carrefour, Walmart and Tesco are piling in. Yet neither they nor any of their local rivals comes close to dominating China the way Walmart dominates the supermarket business in America. The biggest chain, Shanghai Bailian, has only 11% of the market and barely registers outside its home region.
A comparison of Walmart’s Chinese operations with those of Wumart, a Beijing-based chain, is illuminating. Wumart is cheaper—hence that heap of raw chickens. Walmart is considered more fancy, a fact that may surprise American shoppers. Its stores are well-lit and spotlessly clean. Its wares are safe, reliable and tastefully displayed, though they differ somewhat from those on offer in Arkansas. Basins brim with live fish and sea turtles that clients can kill at home or have slaughtered on the spot. Other delicacies include birds’ nests, pigs’ feet and sea cucumbers (which resemble foot-long aquatic slugs).
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