Giants in Asia: The Two Largest Retailers

Giants in Asia:

The two largest retailers i.e. American -- based Wal-Mart and France's Carrefour have targeted the Asian market with varying results. These varying results have been realized despite of the fact that these two giants have provided large stores stocked with general merchandise and groceries. Notably, the entry of Wal-Mart and Carrefour into new national markets is basically a major shock to local retailers who have seen the contemporary status quo of various decades influenced by these international competitors. Wal-Mart's entry into the Chinese market thrived significantly as the retailer revitalized the retail sector in China. On the contrary, the company's entry into the retail sector in Japan was more problematic than in the Chinese retail sector to an extent that it was forced to find a local partner after evaluating this market for four years. For Carrefour, its entry into Asia was mainly characterized by the movement of its operations into Taiwan, China, and Korea. The firm also entered the Japanese market at nearly the same time as Wal-Mart though it had previously avoided this country due to high land prices.

Presence of Hypermarkets in Countries:

Hypermarkets are generally described as superstores containing both supermarkets and department store, which results in an extensive retail store that carries a huge range of products under a single roof. Some of the wide range of products contained in a hypermarket includes general merchandise and complete range of grocery products. The existence of hypermarkets in a particular economy is mainly geared towards allowing customers to meet all their regular shopping needs in a single trip.

The American-based Wal-Mart and France's Carrefour are examples of hypermarkets that significantly impact the global retail sector. Regmi & Gehlhar (2005) argue that together with supermarkets, the presence of hypermarkets worldwide have contributed to liberalized trade and internationally-focused commodity and financial markets. This trend is evident from the fact that many multinational chains or stores are continually seeking to operate in new markets across the globe. In most cases, a significant portion of retail products in developed countries like the United States are usually sold through supermarkets and hypermarkets. While these countries have similar large shares of hypermarket sales, the structure of the retail outlets in the particular developed-country markets is largely influenced by the cultural and lifestyle differences.

While many multinationals, especially hypermarkets seek to enter into new markets, there is a considerable difference in the presence of hypermarkets across countries. Actually, hypermarkets are more common in certain countries as compared to others due to various reasons. Some of the major reasons attributed to this difference include the cultural and lifestyle differences across countries, the various business challenges within the country, and the underlying market factors. The presence of Wal-Mart and Carrefour in the Asian market was mainly influenced by these factors, which had significant impacts on the firms' business initiatives and success.

Competitive Advantages for Foreign Retailers in Asian Markets:

The ability of foreign retailers to thrive in new and foreign markets like the Asian markets is mainly dependent on the competitive advantages they enjoy upon entry into these markets. While there are several advantages of going global, the main objective of such initiatives is to develop and expand the business. Actually, the knowledge a business obtains from entry into foreign markets like the Asian markets provides an opportunity for development of new ideas, new marketing initiatives, new approaches, new customers, and new confidence in international business (Wyld, 2011). Given the increased competitiveness in international business, generating and maintaining competitive advantage is an extremely crucial strategy.

Some of the major competitive advantages enjoyed by foreign retailers like Wal-Mart and Carrefour upon entry into foreign markets include dispersing activities into several locations and cheap labor. Furthermore, the foreign retailers obtain more alternatives in locations and favorable conditions to expand because of drop in rent, which contributes to a significant competitive advantage (Daily, 2012). The other significant competitive advantage for these firms is the relative ease in launching new products in such markets because of the well-established global brand name and reputation. In most cases, these foreign retailers do not need to spend much money on advertisements because they already have brand loyal customers to keep their operations running.

Competitive Advantages for Local Retailers:

Despite of the entrance of foreign retailers like Wal-Mart and Carrefour into the Asian market, particularly the Chinese food retailing market, the local retailers still dominate this sector because of the exclusive competitive advantages that are transferable to other Asian countries (Chan, 2011). First, these local players enjoy being closest to the local customers i.e. physically and culturally because of the national expansion to underserved mass market. Secondly, the local retailers have the advantage of preference and easy access because many local consumers are still unreachable by the multinational stores. The other competitive advantage is that local retailers obtain deeper insights and extended store coverage.