The Indian bhangra , the Latin American tango, the African drums and the royal British wedding. Visitors to the picturesque town of Fayetteville in Arkansas, US who were treated to glimpses of world culture had to remind themselves several times that they were not at a sports or cultural extravangaza but at the annual shareholders' meet of the world's largest corporation. With Hollywood superstar Will Smith hosting the show, the 17-year-old American Idol winner Scott McCreery, crooner Alicia Keys and the popular band Black Eyed Peas performing, there was no doubt that Wal-Mart cannot shake off its American lineage.
But the company's international business that contributes close to a quarter of its overall revenues got its fair share of acclaim too during the event. The figures, after all, were there for all to see. Apart from clocking revenues of $109 billion, in its fiscal first quarter, Wal-Mart's international revenue rose 11.5 per cent, compared with a 0.6 per cent increase at its US business.
Throughout the four-day event, all executives of the company, including the CEO Mike Duke, were categorical that Wal-Mart now sees opportunity for growth in all the countries it operates in. This correspondent, present at the shareholders' meet, was part of a media team from India hosted by Wal-Mart.
While China, Brazil, the UK and Canada are key overseas markets for the global retail major, the company is upbeat about Africa and China. One of the goals is to double Chile's revenue to $10 billion by 2018.
The company has also got a foothold in the African markets with the recent $2.4-billion acquisition of South Africa-based Massmart, and is looking forward to the Indian FDI regulations to relax during the course of this year.
Wal-Mart's takeover of Massmart, which has 288 stores in South Africa and retail outlets in about more than a dozen African countries, gives the world's largest retailer a strong entry into the continent. In India, through its joint venture with Bharti Enterprises Ltd, the company has opened six wholesale stores.
Underlying its globalisation process is a strong local commitment to local needs, stressed Mike Duke, the CEO. “The key strategy for the growth for our international business will be localisation powered by the Wal-Mart retailing expertise. Whether it's in product or promotion or service, localisation will be the way forward,” he said. In China, for instance, Wal-Mart tied up with Frito Lays to launch a wheat-and-rice-based snack. In India, the company has launched a private label in the desi ghee segment, a product category that is unique to the local market. In Mexico, the retail giant has designed and manufactured T-shirts made of recycled plastic and cotton.
In the last week of April, all Wal-Mart stores across the UK celebrated the royal wedding with roaring sales figures, thanks to wedding-based merchandise such as paper cups with the royal couple's faces printed on them, lookalike wedding rings and champagne for the occasion. The stores sold close to 150,000 Kate and Will party cups and mugs, 100,000 cups of champagne, 35 million cups of tea and 30,000 lookalike wedding rings priced at $5 each.
In Argentina, all the 481 Wal-Mart stores are getting ready for the FIFA World Cup in 2014 and the Olympics in 2016 with product ideas that could catapult sales in the region. In Japan, sales in Wal-Mart outlets in the tsunami-hit Sendai area rose 20 per cent in revenues in May. Wal-Mart Japan head Toru Noda talked about other retail chains leveraging the disaster period to increase their revenues by hiking prices even as Wal-Mart stuck to its everyday low price strategy.
Apart from new product ideas and innovation in promotion and services, emerging markets would be priority areas for investments too in future, said Doug McMillon, President and CEo of Wal-Mart International. In 2010 alone, the company added 20 million sq. ft. of space with most of it in China and Brazil. Currently the company has 4,557 stores internationally and 4,300 stores in the US. While increasing same store sales year on year will be the strategy for its US chain, Wal-Mart will look to grow through acquisitions and e-commerce in the emerging economies. With one in four Internet users living in China, the company will also bet on its e-commerce business taking off in the country.
Mike Duke told 1,500 associates (employees) from 15 countries attending the annual shareholders meet that competition was getting better all over the world and that's why it's critical to focus on the customer. He said that although its offerings may change to suit the local markets, the company's mission of offering EDLP (everyday low price) and EDLC (everyday low cost) will continue to power its growth all over the world.