Where Walmart Isn't: Four Countries the Retailer Can't Conquer

BusinessWeek

Walmart (WMT) is the biggest retailer in the world, with sales of $135 billion in 26 countries outside of the U.S. But it doesn’t have stores in some of the world’s biggest markets. Not in Germany, not in South Korea, not in Russia. And, as of this week, not in India either.

On October 9, Walmart announced that it was breaking up with its Indian partner, Bharti Enterprises, which means its ambitious plans to open hundreds of supercenters around the country won’t be realized anytime soon. In the official statement, Scott Price, the head of Walmart Asia, referred obliquely to “investment conditions,” as part of the problem. He was more direct in an Associated Press interview two days earlier at the Asia-Pacific Economic Cooperation summit. He said that the Indian government’s requirement that foreign retailers source 30 percent of the products they sell from small and medium-sized Indian businesses is the ”critical stumbling block.” Walmart does have a wholesale business in India, which it is keeping.

Price didn’t mention that the Indian government is investigating allegations that Walmart violated rules governing foreign investment in the retail industry or that Walmart is conducting an internal probe on possible violations of U.S. anti-corruption laws.

Walmart has not figured out a way to enter Russia, either. For nearly six years, it looked to buy a local company that could ease potential cultural and bureaucratic misunderstandings. It lost a bid for a very promising partner, a discount chain called Kopeyka, in 2010.  Walmart later closed its Moscow office after saying disagreements on price had thwarted its acquisition plans.

Then there’s Germany and South Korea. Walmart opened stores in both countries and closed them in 2006. The Germans didn’t like Walmart employees handling their groceries at the check-out line. Male customers thought the smiling clerks were flirting. And many Europeans still prefer to shop daily at local markets. In South Korea, Walmart also stuck to its American marketing strategies at the time, concentrating on everything from electronics to clothing and not what South Koreans go to big markets for: food and beverages.

Over the summer there were rumors that Walmart was interested in purchasing the Hong Kong chain, Park and Shop. In the company’s most recent media call August 15, Doug McMillon, the head of Walmart International, wouldn’t comment on that.

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