I’m interested in Wal-Mart’s failure in S. Korea because it’s an interesting case of both a business which did not respect local markets and a market where local competition is very strong.
Carrefour left Japan a few years ago and Nokia has no presence in Japan either. Wal-Mart in Japan is struggling with their Seiyu brand. Google in Japan is “struggling” as well (i.e. they are not dominant.)
Wal-Mart and Carrefour, which entered the country in 1996, put off South Korean consumers by sticking to Western marketing strategies that concentrated on dry goods, from electronics to clothing, while their local rivals focused on food and beverages, the segment that specialists say attracts South Koreans to hypermarkets.
The Wal-Mart and Carrefour outlets in South Korea are simpler in appearance than those of E-Mart and other competitors.
Wal-Mart and Carrefour sold products by the box, while E-Mart and Lotte built eye-catching displays and hired clerks who hawked their goods with megaphones and hand-clapping.
Over the years, South Korea has been a graveyard for some of the most competitive global brands. It is hard to find any Nokia cellphones in South Korea, for example.
Local giants Samsung and LG dominate, and Nokia, the world’s primary cellphone maker, basically stopped promoting its cellphones here in 2004.
Google is a small player in the local Web search engine market, which is dominated by the Naver Web site of the South Korean company NHN and the portal of Daum Communications.
Naver and Daum encourage users to post questions and let others answer them, creating a fast-expanding Korean-language database that attracts Web surfers.Nestlé, the food and beverage company, also failed to make a mark with its flagship baby formula segment.
Wal-Mart Selling Stores and Leaving South Korea – New York Times
“put off South Korean consumers by sticking to Western marketing strategies that concentrated on dry goods, from electronics to clothing, while their local rivals focused on food and beverages”
Nope, not true.
“The Wal-Mart and Carrefour outlets in South Korea are simpler in appearance than those of E-Mart and other competitors.”
Also not true, although Carrefours tend to be shabbier.
“Wal-Mart and Carrefour sold products by the box, while E-Mart and Lotte built eye-catching displays and hired clerks who hawked their goods with megaphones and hand-clapping.”
In Australia, where it’s also common (but disappearing) at the low-end streetside retailers (though not at grocery places), it’s called ‘spruiking’. But no, again. All of the major box stores (including the two major players not mentioned, Samsung-Tesco and Costco) do this, almost always in the fruitandveg and meat departments.
It’s not a matter of ‘respecting local markets,’ and non-homegrown companies who think that’s a solid base for their dreams of entering the Korean market are in for a rough time of it. Local competition? Sure, but the key word in that phrase isn’t ‘competition’…
I need some way to spin my writing and speaking skills and decade’s worth of local knowledge into a consulting gig, and the NY Times needs some goddamned fact checkers.
Somebody want to hook me up, here?
Stav, you ought to quote that article on your blog and write about it. Email the NY Times too.
I’ve been quoted a number of times in the press- they take stuff from my blog from time-to-time.
You do need to state your experience up front so people understand how to weight your opinions.
Quoting from local media also might be relevant too.
I do think that it is a matter of “respecting local markets”.
From my own experience it was obvious (even for a western eye) that carrefour is bound to fail.
WalMart will supposedly move into China where the market is more fragmented and there isn’t one dominant player.
I’d hate to speculate, but I have a feeling they will fail again.
Carrefour is still in Japan. There is one in Saitama, on RT 16, about 10 minutes past Iruma. There is also one near Granberry Mall in Machida. They are nothing to write home about but are still there nonetheless.
“Stav, you ought to quote that article on your blog and write about it. Email the NY Times too.”
The gap between ‘ought’ and ‘will’ is a deep and treacherous one. Heh.
Every time I consider writing about Korea again, I get cranky and a little sad. Maybe one of these days.
“I do think that it is a matter of “respecting local markets”.”
Well, that’s fine. But I think the phrase ‘respecting local markets’ (all respect to Gen) is essentially meaningless. I’d have to think pretty damn hard (and I’m too lazy to do so at the moment, but feel free to take up my slack if you’re so inclined) to come up with a foreign corporation that has made inroads in Korea (I could stop there) that has ‘respected local markets’. Honestly — and I do understand the issues involved — I’m not even clear on what that is supposed to mean, in the Korean context or elsewhere.
I used to work for Carrefour Belgium, I’m actually glad I quit my job.