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New leader picked for Wal-Mart China

Rob Schmitz Feb 7, 2012

David Brancaccio: The retail giant Wal-Mart has named a new head of its China operations. Greg Foran used to run Woolworths in Australia.

As Marketplace’s China Bureau Chief Rob Schmitz reports, he’ll need to work on an interesting challenge: the sense that Walmart in China is a fancy place to shop.


Rob Schmitz: It’s been a tough year for Wal-Mart in China. Last Autumn, it had to close thirteen stores due to a food labeling scandal. Since then, it’s been shedding market share to up-and-coming Chinese retailers.

Shaun Rein: If Wal-Mart’s going to win in China, they really have to change their DNA.

Shaun Rein, author of “The End of Cheap China,” says Wal-Mart transplanted what worked in the U.S. into the China market. Bad strategy, says Rein — in China, there’s always someone who will beat you on price.

Rein: Over the last five years, they’ve misunderstood who their main purchasers are. Their main core purchasers are coming to Walmart for a premium shopping destination.

Wait. Did he just call Walmart a “premium shopping destination”?

Rein: Yeah, in China, Walmart is considered a premium destination.

Shoppers in China like Walmart’s imported food made under strict health standards. Having a deep understanding of what Chinese consumers want will be crucial for its new China CEO, says Rein. But he says that might be tricky — Greg Foran, Wal-Mart’s new head of China operations, has no previous China experience.

In Shanghai, I’m Rob Schmitz, for Marketplace.

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