Wal-Mart Ramps Up in Africa

As we noted yesterday, Wal-Mart is a very creative and innovative firm, not just a giant discounter that sells a lot of stuff.
Another indication of this is the retailer’s heightened interest in doing business in Africa. Devon Maylie, writing for the Wall Street Journal, says that: “Six months after the U.S. company won final regulatory approval of its $2.4 billion deal for control of African retail chain Massmart Holdings Ltd., South African suppliers are scurrying to learn the Wal-Mart way. They are ramping up production, rolling out advertising campaigns, and sweating over whether they can sell at discounted prices for extended periods. Some are even considering requests to begin night deliveries — long a taboo in a country notorious for carjackings. The courtship of the world’s largest retailer represents a potential turning point for companies that make everything from bread to umqombothi (a type of beer). By linking up with Wal-Mart, some South African suppliers could join a global supply chain for the first time.”
Maylie adds that: “A few players dominate South Africa’s retail industries, a legacy of apartheid, when many companies of all sorts pulled out or stayed away under the threat of sanctions. Three domestic chains control about 90% of the supermarket sector. And South African food suppliers were left to build their own brands while jostling for a share of a relatively small market. By coming into South Africa, Wal-Mart has set its sights on a bigger market — the entire continent. And South African suppliers see that expansion as their ticket into a wider, even global, market.”
Click the image below for a WSJ video on Maylies’ report.

 

Photo by Per-Anders Pettersson for the Wall Street Journal

 

This entry was posted in Global Retailing, Part 1: Overview/Planning, Part 2: Ownership, Strategy Mix, Online, Nontraditional, Part 4: Store Location Planning, Part 5: Managing a Retail Business, Part 6: Merchandise Management and Pricing, Part 8: Putting It All Together, Video Clips (non-career) and tagged , , , , , , , , , , , . Bookmark the permalink.

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