The Wallmart Effect

I wouldn't expect to much from Wal-Mart. it will just be business as usual for Makro and the other MasMart Brands.
 
dkhaley said:
As for affecting Core pricing, doesn't Core have an exclusive license to import Apple products?
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One can only hope that given Walmart's buying power their arrival signals the end of core's monopoly.
 
None of the Mass Mart stores (Game, Makro, Builder's Warehouse, etc.) will be re-branded.
There will not be any Walmart Brand stores in SA.
They are simply buying a 50% stake in Mass Mart.

The only long-term benefits you can expect to see will be a greater range of products and maybe some competition on those items that enjoy competition from others stores in SA.
Don't expect prices to fall the day after they take control.
 
killadoob said:
When you say on their own terms how do they determine what tax they will have to pay?

What is the TAX on items coming in to SA and items coming into the US? How will walmart get around our heavy taxes?
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Let's take iPads. Core buy say 10 000 iPads a year. Walmart sell 1 000 000. I think maybe Mr Jobs will say, sure let's give Walmart a bit of bulk discount on that one.

As far as the taxes go, that would depend on the products. But, for example, on laptops (and tablets etc) import duties are equal to exactly 0%. So that one's pretty easy to calculate.
 
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Garyvdh said:
None of the Mass Mart stores (Game, Makro, Builder's Warehouse, etc.) will be re-branded.
There will not be any Walmart Brand stores in SA.
They are simply buying a 50% stake in Mass Mart.

The only long-term benefits you can expect to see will be a greater range of products and maybe some competition on those items that enjoy competition from others stores in SA.
Don't expect prices to fall the day after they take control.
Click to expand...

They might not have a Walmart sign on the door, but they'll have plenty Walmart in the procurement processes. I'm expecting significant (at least 10%) cost reductions in consumer electronics. And I'm expecting it to happen pretty fast, specials at launch and across the board at least by the end of the year. So I'm holding off buying the new flat screen until the prices come down a bit.

And I'll wager the price differential on Apple products in relation to US markets will come down markedly too. Sorry Core.
 
Speedster said:
Let's take iPads. Core buy say 10 000 iPads a year. Walmart sell 1 000 000. I think maybe Mr Jobs will say, sure let's give Walmart a bit of bulk discount on that one.

As far as the taxes go, that would depend on the products. But, for example, on laptops (and tablets etc) import duties are equal to exactly 0%. So that one's pretty easy to calculate.
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Say what? Import duties are 0%, are you sure about this?
 
Speedster said:
Well, if you've ever been in a Walmart you'd know they are big sellers of Apple products. I don't see them buying from Core in SA, so they'll import on their own terms. Hence the pressure in Core's margins.

EDIT: Typo's fixed...
Click to expand...

If Core are the sole importers for South Africa then Walmart cannot source directly from any supplier without the supplier breaching their terms with Core who will then be in for a world of schit. IOW Walmart will have to buy from Core. However with Walmart's economies of scale, this could soon change and I expect it will. Walmart just became a major risk to Core's business...
 
DJ... said:
If Core are the sole importers for South Africa then Walmart cannot source directly from any supplier without the supplier breaching their terms with Core who will then be in for a world of schit. IOW Walmart will have to buy from Core. However with Walmart's economies of scale, this could soon change and I expect it will. Walmart just became a major risk to Core's business...
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My point exactly. Core won't have a never-ending exclusivity agreement with Apple. At some stage it will expire and I'm sure Walmart will then look to worm it's way in there.
 
Speedster said:
My point exactly. Core won't have a never-ending exclusivity agreement with Apple. At some stage it will expire and I'm sure Walmart will then look to worm it's way in there.
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We do need an importer of Apple products unless Apple invest directly into SA (which Walmart could negotiate - but that's much further down the line.) IIRC Apple prefer this model for various reasons. I highly doubt Walmart will ever receive exclusivity as an importer with Apple though - in fact I'm quite sure it will never happen. What we could hopefor is that Core's exclusivity agreement falls away but I'm not holding my breath on this one for now...
 
More than likely never happen... but what COULD happen is that Walmart (if it feels so inclined) could be instrumental in getting Core's exclusivity ended...

But don't expect to see prices matching the US... they will match the UK and Europe....
 
B.O.F.H. said:
More than likely never happen... but what COULD happen is that Walmart (if it feels so inclined) could be instrumental in getting Core's exclusivity ended...

But don't expect to see prices matching the US... they will match the UK and Europe....
Click to expand...

Not expecting matches, just a decrease in the price differential.
 
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