Layoffs Or Intensifying WAL-MART China'S Opening Plan Is Hard To Achieve

With the adjustment of the headquarters office structure, WAL-MART will also lay off nearly 250 people in China before the end of the year.

WAL-MART said that the proposed reduction would account for 0.2% of the total number of WAL-MART employees. The Dalian regional office in the northeast region will be cancelled and the operation area will be reduced from 6 to 5.

Anhui will be placed under the management of East China in the 33 new operational divisions.

Redundancy is only a measure of WAL-MART's massive integration.

In the next two years, WAL-MART will continue to close stores, or be accompanied by large-scale layoffs.

The industry believes that there are serious problems in the commodity structure, which is seriously mismatched with the growth of consumption demand in China's one or two tier market.

WAL-MART electric 1 shop and WAL-MART supermarket synergy, naturally limit the overall development of WAL-MART.

WAL-MART is too slow in the field of e-commerce, and its development ideas are not clear.

Its pnational mode decides its unified allocation by headquarters, and the integrated system of global development planning is not flexible enough.

The shop plan is difficult to realize

Layoffs or intensified

WAL-MART is now the largest retail giant in the world, making its reputation as a whole in the industry chain.

In the lower reaches of the WAL-MART, the private brand market share is expanded at a low price. In the upstream, it recommends the procurement base, and establishes a green supply chain including suppliers, logistics and stores, eliminating the intermediate links.

WAL-MART even plans to allow millions of Chinese farmers to participate in the agricultural super docking project in 3 years.

However, the number of stores that WAL-MART has closed in China has increased significantly since the beginning of this year.

WAL-MART wrote to reporters in a written reply that it expected to close more than 30 stores in 3 years including last year.

And this prediction is on schedule.

In March alone, 6 stores in WAL-MART were closed, and WAL-MART has closed more than ten stores since the beginning of this year.

Redundancy is only the tip of the iceberg of WAL-MART's massive adjustment this year.

On the other hand, WAL-MART is claiming to add 110 new sites, which is being questioned by the industry.

In October last year, WAL-MART global president and chief executive officer, Michael Duke and President and chief executive officer of WAL-MART China, announced that in the next three years, WAL-MART will accelerate its development in China and set up 110 new sites, including shopping malls and distribution centers, in Beijing.

Industrial Economic Observer Liang Zhenpeng said: "WAL-MART stores in the global mode, similar to low-end comprehensive department stores, and such a position is the biggest impact.

Over the past few years, store costs have increased rapidly, consumers are no longer dependent on physical stores, and retailers' single store performance is declining.

The company's plans to add 110 stores will be difficult to achieve in the future.

The focus of China's future is sustained investment and steady development, and quality is more important than quantity.

He believes that the retail industry is still facing many challenges and fierce competition in the industry. WAL-MART will continue to make adjustments in the Chinese market, reducing unnecessary costs and reducing expenses.

Professor of foreign trade and economics university said: "WAL-MART's global low price strategy enables it to have strong bargaining power with suppliers and large-scale procurement to increase cost advantages.

However, it has a great disadvantage to reduce the cost of purchasing through the link of the value chain and gain profit model with the difference of commodity price.

It indicates that WAL-MART purchases buyout directly through unified mass purchase. However, once the supplier's cost increases, the WAL-MART which is originally in the stage of low profit will be affected, and its logistics cost reduction will not be realized in the near future.

To ensure a low level of sales, enterprises must consider reducing logistics costs and procurement costs from the value chain. If irrational, it is easy to break out of food safety problems, so image damage, performance continued to decline.

In the current stage of rapid impact of the electricity supplier on the retail industry, the hidden danger of WAL-MART's profit model has emerged.

Analysts believe that WAL-MART's global strategy is more unified at present, and the strategy of adjusting measures to local conditions is not very obvious. China's economic development is no longer the same as it was decades ago, and WAL-MART's strategy and strategy have not been fundamentally adjusted. This lag will lead WAL-MART to take a contraction strategy in the next few years. WAL-MART's logistics and IT advantages are hard to play in China, and the pace of adjustment in China is slowing down.

Let's look at WAL-MART's key business platform - Shop No. 1.

At the beginning of WAL-MART's entry into the Chinese electricity supplier field, its tentacles were launched in full swing to attack local B2C manufacturers in China.

In the US market, WAL-MART online sales are second only to Amazon and even surpass. However, in the Chinese market, WAL-MART is facing a crisis in the field of e-commerce.

WAL-MART's Internet sales increased 30% to $10 billion last year, and Amazon's growth rate was 20%.

In the Chinese market, WAL-MART is facing strong threats from Alibaba, Jingdong and other Chinese local businesses.

Two years ago, in order to speed up the local electricity supplier, WAL-MART formed three models in the field of electricity business, namely, the 1 shop, the Sam member store online shopping mall and the new online shopping platform developed by itself. However, WAL-MART focused on the 1 shop in the electronic business platform.

Liang Zhenpeng said: "at present, retail businesses are walking on two legs. The layout of WAL-MART electric business in China is mainly dependent on shop No. 1, while the 1 shop has too few products.

The market share of No. 1 store declined this year.

Data from the second quarter of 2014 show that compared to Ali, which occupies half of the B2C market, the market share of shop No. 1 accounted for less than 1.5%.

"Gome online, suning.com and other e-commerce sites in the background purchase are synergy with physical stores, thereby effectively reducing costs.

WAL-MART electric 1 shop and WAL-MART supermarket synergy, naturally limit the overall development of WAL-MART.

WAL-MART is not strong enough in China, and its pace is too slow.

Its pnational mode decides its unified deployment by headquarters, and the integrated system of global development planning is not flexible enough. There are many breakthroughs in the online and offline commodity categories over the years.

According to the insiders, WAL-MART, a location supermarket, offers low-end products in the Chinese market for more than a decade, but it does not involve many high-end products that can bring higher turnover. However, in the Chinese market, consumers need huge demand for high-end goods.

Tens of thousands of square meters of WAL-MART stores have serious problems in the commodity structure, which is seriously mismatched with the growth of consumption demand in China's one or two tier market.

The above professor said: "a large scale enterprise, if the turnover is developing rapidly and the profit is increasing, even if the business process is cumbersome, it is reasonable to need adjustment and layoff.

At present, the stores in WAL-MART market are shrinking, the performance is mainly dependent on the growth of e-commerce business, and the market share of electricity suppliers is also declining, which is very dangerous.

The decline in performance, accompanied by layoffs and closes, is not difficult to understand.

WAL-MART's series of adjustments should first be built on the promotion of performance rather than conservative contraction.