How could E-mart merge Wal-mart in Korea?
2 years ago, there was a shocking event in distribution market. Wal-mart, the largest distribution company of the world has sold their whole business to E-mart and withdrawn from Korean market.
Wal-mart, which started their business 30 years ago, had ruled as a leader of retailing market by ‘every product, by everyday low price’. It was supported by innovative supply chain and generalization policy, and then wal-mart could continuously rule. They’d become the largest distribution company, and they tried to enter Korean market by 2nd time in Asia. However, during they were running business in Korea, wal-mart had taken inferior market-share continuously, and then finally wal-mart had to quit from Korea. I want to see the reason which made wal-mart fail in the market of Korea.
2 years ago, there was a shocking event in distribution market. Wal-mart, the largest distribution company of the world has sold their whole business to E-mart and withdrawn from Korean market.
Wal-mart, which started their business 30 years ago, had ruled as a leader of retailing market by ‘every product, by everyday low price’. It was supported by innovative supply chain and generalization policy, and then wal-mart could continuously rule. They’d become the largest distribution company, and they tried to enter Korean market by 2nd time in Asia. However, during they were running business in Korea, wal-mart had taken inferior market-share continuously, and then finally wal-mart had to quit from Korea. I want to see the reason which made wal-mart fail in the market of Korea.
First, there already were other discount stores, which were leading the market. 5 years before wal-mart entered to korea, e-mart had been established as the1st discount store, and other following stores had been also. , they had been grown up by selling ‘every product, by everyday low price’ which was advantages of walmart. Wal-mart’s distinguishable point was no longer distinguishable in korea, so they couldn’t help entering as following compony, not leading one. I think that, Korean companies could defend on wal-mart’s low price attack, and that they did. When wal-mart entered, e-mart performed progressive marketing ‘guarantee of lowest price’ and took their poser away. In addition, wal-mart’s position made somewhat premium as foreign company, and that bothered their lowest-price-image.Second, they should have enlarged their market share by maximizing their distinguishable advantage, but they failed. They adjusted their generalization policy, which was their way to success, to korea. I think they should have done their policy in dimension of korea, and Korean market should have been specialized differently to other markets. Wal-mart set up their every thing, from product to height of board, but Korean consumers didn’t want that. Rather Korean store reacted to their needs. E-mart recognized that the patterns of Korean customers were about food product leaded by housekeepers, so they did, and it worked. Korean wanted the atmosphere of market to be loud like traditional market, so Korean stores put the selling agents to make that and succeed, but wal-mart failed, because they made the atmosphere like department store. I have been both wal-mart and e-mart, and I could feel the different mood of two stores.
Retailers should deliver what customers want, because they contact with them directly. The failure of wal-mart shows that very well. I’ve learned how to do if I get a job related to retailing.
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