Wal-Mart leaves S. Korea
I’m interested in Wal-Mart’s failure in S. Korea because it’s an interesting case of both a business which did not respect local markets and a market where local competition is very strong.
Carrefour left Japan a few years ago and Nokia has no presence in Japan either. Wal-Mart in Japan is struggling with their Seiyu brand. Google in Japan is “struggling” as well (i.e. they are not dominant.)
Wal-Mart and Carrefour, which entered the country in 1996, put off South Korean consumers by sticking to Western marketing strategies that concentrated on dry goods, from electronics to clothing, while their local rivals focused on food and beverages, the segment that specialists say attracts South Koreans to hypermarkets.
The Wal-Mart and Carrefour outlets in South Korea are simpler in appearance than those of E-Mart and other competitors.
Wal-Mart and Carrefour sold products by the box, while E-Mart and Lotte built eye-catching displays and hired clerks who hawked their goods with megaphones and hand-clapping.
Over the years, South Korea has been a graveyard for some of the most competitive global brands. It is hard to find any Nokia cellphones in South Korea, for example.
Local giants Samsung and LG dominate, and Nokia, the world’s primary cellphone maker, basically stopped promoting its cellphones here in 2004.
Google is a small player in the local Web search engine market, which is dominated by the Naver Web site of the South Korean company NHN and the portal of Daum Communications.
Naver and Daum encourage users to post questions and let others answer them, creating a fast-expanding Korean-language database that attracts Web surfers.
Nestlé, the food and beverage company, also failed to make a mark with its flagship baby formula segment.