Chapter One: Foreign Retailers in China - Stories of Success and Setbacks by Shuguang Wang and Paul Du
Introduction 1. 1990s Wrigly, Lowe created TNC allowing foreign investments(pol't
and economic approach)
Vida and Fairhurst (1998) 1. Direction and pace of retail internationalization changed by
2. Key: resource availability (ie. consumers/cond.)
3. Direction of international retail expansion from western to eastern
Retail Internationalization (Dawn, 2003) 1. Retail capital: production and consumption ww.
a. Stability - a lot of fluidity in considerations
b. Consolidation -adjust to new cond.
c. Control - vertical/horizational chn.
d. Dominance - using home strategy to rule
China Frontier for TNC 1. Wang (2003): bypass regulatory barriers and West had more
advance information technology in so cultural distance less
2. WTO (Dec.2001): eliminate trade barriers
Examining post-WTO China in foreign 1. Analyze market penetration + TNC performance
retailers 2. Examine corp. strategies in different levels of market
3. Myers and Alexander (2007): degree of control more/less attractive
a. Govn't stats
b. Corp. web
c. News reports
Benchmarks of consumer market size 1. Population Size
(Recent changes in market conditions 2. Per capita income
and elimination of unconventional trade *Largest spent on food followed by education, housing, transportation
barriers) (1970s: watch, bike, sewing machine)
Progression of China Moving into WTO 1. 1992: Opened up markets
2. 1995: restrictions unconventional WTO/GATT and only 11 cities
3. 2001: China into WTO (3 years l8, remove rules)
4. 2004: Allowed wholesale, wholly own retail, in-store and other chn.
of retail allowed, povt gov't alllowed to approve future
*Annual inspections must pass
Sucess of Foreign Retailers 1. Degree of market penetration/level of business performance
2. Major foreign retailers: Western, Japanese, Southeast Asia
3. West : highest penetration in China because of WTO-entry (highest
with Walmart and lowest with Makro and Ikea)
4. Japanese: earliest foreign retailers (slower and geographically
limited compared to West)
5. Southeast Asia: Capture larger market share than Japanese (esp.
trust-mart and RT-mart)
Examination of Corporate Strategies 1. Retailer offer competitively superior product by local consumers
2. Retailer develop superior economics across value chain
3. Global retailers execute in local