Hahahaha ! This will cool uchumi's mad rally.

http://www.ventures-afri...omes-walmart-expansion/
Walmart is looking to expand its operations in Africa and its next port of call – Ethiopia.


Walmart and Tesco are at each other's necks in a bid to own stakes in the African market.

Kenya is a big market for these superstores seeing as only 40% of the consumers actually do shopping at the more than 100 outlets of the 4 supermarkets. Rwandans, Ugandans and Tanzanians (to a lesser extent) are becoming ever more affluent, the middle class has grown significantly in these countries and they represent a very key target market. Expect even more superstores to come.

Ethiopia is the new frontier market in this region. The country has really opened up to allow foreigners to set up businesses there.

@essyk: Tesco took over Uchumi outlets? Really? And Uchumi did not close down due to bankruptcy; it was insolvency. Those are 2 different things.

Walmart will not get into the Kenyan Market....they tried but after a market analysis they opted not to

My view on this is very diff.
cz I ask myself,why are the products not available since most of what walmart sells can easily be manufactured by ethiopians if they have the expertise,money and facilities.
But you know the African mentality 'Foreign is good quality'.One would rather buy frozen vegetables from China than buy fresh from local retailer.
The goverment should create a conducive biz environment to enable to enable local investors compete with these big giants.
That to me is progress.



Ok I just read that again and I somehow disagree.
Allow me to ask. Who better understands the behaviour of Ethiopian market? Isnt it the local retailer? The investor relies on market research stats, but there's this local touch they miss out.

Many foreign investors hardly understand the 'african market'.Many assume they can use the same yard stick here but it flops big time over a period of time.
Instead of adjusting to the local working system,they instead prefer a complete overhaul and that marks the beginning of a downfall and a shake up in the wrong direction.
Those who succeed (like the chinese) do so because they work with what is there however remote.If anything,they assimilate the local culture giving them an edge over the others because they become accepted fast.
After acceptance biz grows.

So if you are talking about retail nous,I think it should be reverse.
Walmart has few things to learn from locals,after all isn't the success brought about by the local retailer the reason Walmart is setting biz there?
Call them opportunists if you may.:
Ok In summary they are not bringing any retail nous.Just to ride on what is there.

You're making some wild assumptions about Walmart, and I think it is based on what you think the market should look like and how the forces of market should act, unfortunately you're wrong in all of them.

First Walmart has the best business model in the world when it come to retail, forget about what you've heard about Walmart, 90% of it come from people who do not understand or have never been to any strategy lesson. I am not naive, if Walmart was to walk into Kenyan Markets alot of other business will close down but ultimately the Kenyan consumer and economy will benefit.

Secondly, for anyone to understand how to benefit from entry of Walmart to a Market, they first must understand the Walmart supply chain, unlike other business, Walmart has been very successful because of it's efficient supply chain, Looking at Walmart supply chain, there is no business reason why Walmart would source vegetable to an international supplier! Walmart supply chain model is designed in such a way that the most effecient, the fastest and the cheapest supplier win the tender, alot is tilted to a local supplier it is upto that supplier to meet Walmart demands!

Thirdly, Walmart have damn good business and strategic analysts, the question of who is best to understand Ethiopian consumer will be answered fully and exhaustively!

@essyk

I recognize that we hold two different school of economics, you look at the economy in small parts and I look at it in totality and I don't think you're wrong based on your line of thinking. I believe the reason why companies source from China is because of price disparities which will eventually close up through the forces of market. You cannot stop the market from searching for alpha it is a defeating strategy. Economy grow because of the ability of a population to save and invest so you can easly offset the effect of cheap chinese good to america economy by pointing at the fact that the population was able to save money and therefore invest because they bought cheaper goods.

Now back to Walmart, again Walmart supply chain is very unique in that Walmart basically bid their shelves and supplier come in and stock the shelves and through their EPR systems suppliers can keep track of the stock in the shelve and know what time to pull the tracks and re-stock again. Walmart itself hold almost no stock in their warehouse unlike all their competitors who have to store good somewhere, pay for transportation and warehouse labor, Walmart do not go through that process.

Best buy the electronic chain is struggling right now yet they source to China too, why? because they cannot match Walmart supply chain strategies, Circut City went out of business 2 yrs ago, Supervalu is struggling to make money. Target is walking in a tight rop and in expanding to markets that Walmart are not yet there so you cannot point at sourcing as the reason why Walmart is successful, it is Walmart Strategy that is damn good!

FYI, I spend 1 yrs following retail industry and I am not a trained economist!

[quote=Sasha]



I get you now.
Thank you.