Reuters reports that “global retailers like Wal-Mart are finding out the hard way that more is not always better when it comes to international expansion, and they are focusing their resources on a select group of countries such as China and India that promise fatter returns.”
This trend is evident in the fact that Wal-Mart has pulled out of both South Korea and Germany, with rumors flying that it also plans to get out of Argentina. Carrefour, the world’s second biggest retailer, has in recent years pulled out of South Korea, Mexico and Japan. Tesco, which is launching a US operation, pulled out of Taiwan last year.
There is a potential problem in counting too much on China to fuel international growth, however. Reuters reports that the “risk is overestimating the market in China, where a population of more than 1 billion people has a considerably smaller number of people with significant spending power.”
This trend is evident in the fact that Wal-Mart has pulled out of both South Korea and Germany, with rumors flying that it also plans to get out of Argentina. Carrefour, the world’s second biggest retailer, has in recent years pulled out of South Korea, Mexico and Japan. Tesco, which is launching a US operation, pulled out of Taiwan last year.
There is a potential problem in counting too much on China to fuel international growth, however. Reuters reports that the “risk is overestimating the market in China, where a population of more than 1 billion people has a considerably smaller number of people with significant spending power.”
- KC's View:
