Tuesday, March 17, 2009

Why Wal-Mart Understands China

One of the blessings / curses of living in such a massive city is the availability of goods. Living in a small town in a much less wealthy part of the country, I was used to living without most amenities I enjoy back home. Everything I needed that I knew I wouldn't find here (french press coffee maker, floss, deodorant, etc.) I had to bring from home. Somehow I didn't realize that this would not be the case this time in a city of 17 million people. Nearly any product you could possibly want or imagine can be found relative ease in this city.

Nowhere is this point better illustrated than the fact that a Wal-Mart is located one subway stop from my dorm. It's actually connected to the station, and I can be at the front door in under 25 minutes from leaving my room.

From my time working at the Wal-Mart Home Office in Bentonville Arkansas, I've been slightly infatuated with the concept of Wal-Mart in China. We opened a store here during the time I worked there, and pictures of the grand openeing were sent out to all employees. It was unlike anything I had ever seen, and I've been fascinated ever since.

Believe it or not, Wal-Mart actually has a pretty substantial presence in China. A lot of multinational companies are scrambling to make a splash in the China market, but not all succeed. Wal-Mart, however, understands China.

Here's why: The building is spread over several floors, so it isn't as initially as impressive as the 'I can't see past the end of the horizon to the other side of the store' effect you get in America. So in order to support the weight of the extra floors, there are massive columns spread throughout. Near the far corner of the personal hygiene department is one such column. It's actually only about 5 feet from the shelves on all sides, so it's really a tight squeeze to get back to the items placed in this area. Seems like a terrible design flaw in an otherwise well-architected building. Whose idea was this? What products could you ever place in such an inconvenient area?


That's right, condoms - and it's pure genius on Wal-Mart's part. Condoms are the life-blood of the one-child policy here, and yet sex is still quite taboo in Chinese culture. Being caught purchasing condoms could be a mortifyingly embarrassing situation. But no one can see anyone in this corner of the store. Unless someone deliberately walks back into this small area, you remain neigh invisible.

While I have no statistics to back it up, I am reasonably confident in believing that Wal-Mart sells more condoms than any other retailer in China.

It takes so much more than simply setting up shop as in your home country to do business internationally. You must understand your customers. And that is why Wal-Mart has succeeded in China.


steve said...

That's fascinating. Are there ways that contraception is encouraged, culturally or by the government?

Simon Lesser said...

I'm not quite sure. But I think I remember learning that the Chinese were actually a bit late in the game using condoms. For a long time they used (and continue to use) a more...well..."retroactive" (read "messy") form of birth control...