Failure to Differentiate Your Customers (Case Study: Walmart in Japan)
In 2018, Walmart’s global sales exceeded 500 billion U.S. dollars. Walmart brought in more than $500 billion in sales globally. Not surprisingly, three-quarters of those sales came from the U.S. While overseas — particularly in Japan — things are not going so well for the American retail giant.
Recent reports have shown that Walmart may be looking to exit Japan nearly 17 years after its initial entry into the Japanese market. This expansion is related to the 2002 acquisition of a minority stake in Japanese grocery store Seiyu, which became a wholly-owned subsidiary in 2008. Like Walmart, Seiyu uses the “Everyday Low Prices” mantra to market to their consumers.2
Since then, until now, Wal-Mart has not performed well in Japan. Aeon, Japan's largest supermarket, controls 45 percent of the market. Walmart's Seiyu, on the other hand, has a 12% market share.
That may not sound bad, but to put it in perspective, let’s consider a popular American store that has expanded into Japan with great success — Costco. Costco has only 26 stores in Japan, but in 2017 they brought in just over $3 billion in revenue. Seiyu, on the other hand, has 331 locations and brought in $7.1 billion in revenue.
1MediaBeacon Inc, Case Study - Companies That Failed Internationally From a Lack of Social Understanding, Dec 23rd, 2019, Accessed 1 June, 2021, https://www.mediabeacon.com/en/blog/case-study-social-understanding
2Reuters, July 12, 2018, Accessed 1 June, 2021, https://www.reuters.com/article/idCAKBN1K137B-OCABS?edition-redirect=ca
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