killadoob
Honorary Master
Why do people think cheap = poor quality? Not always the case but we have been conditioned to think something that is cheap is rubbish.
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Wal-Mart coming to SA
- Thread starter The_Pumpkin_King
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The_Unbeliever
Honorary Master
They are a darn sight better than Game or Makro!
I quite like Game and Makro, thank you very much!
And then there are others like Checkers Hyper and Pick and Pay Hyper.
Wallmart are going to have a hard time getting a foothold in the market. The only way I see them doing it is if they buy out an already established chain.
killadoob
Honorary Master
Or they come in with low prices, SA's will flock to the store
like Gary mentioned, yes, some local businesses will fail....but should we keep the prices expensive for EVERYONE just so a few people's businesses can survive?
if 1 Walmart replaces 10 shops but causes prices to fall, I will not shed a single tear.
if 1 Walmart replaces 10 shops but causes prices to fall, I will not shed a single tear.
DreamKing
Honorary Master
you have no idea how it works in the retails sector.
the biggest retailers are controlling more than 90% of the suppliers chain locally and internationally. Prices are fixing in certain level and they will do whatever they are do to prevent new players to enter SA market. Want REAL competition? Dream ON.
you have no idea how it works in the retails sector.
the biggest retailers are controlling more than 90% of the suppliers chain locally and internationally. Prices are fixing in certain level and they will do whatever they are do to prevent new players to enter SA market. Want REAL competition? Dream ON.
dude....you seriously underestimate wallmart...
i'm guessing they can undersell every single product with a price of 50% of the actual makro/dions/game price for 20 years straight in south africa without running out of money, if they wanted to. (and that will literally kill them all)
they are a HUGE powerhouse and they can do anything they want mate....
Not if they actually employ people who know a little bit about the stuff they're selling, Makro and Game sales people are more interested in standing around talking to each other about their weekend antics than helping customers. Add to that the fact that if you do ask them, you get this :wtf: look.
LazyLion
King of de Jungle
Walmart will have no problem smashing the competition... especially where prices are higher. They set up shop in convenient locations and build massive superstores... they would not even need to buy out another chain (their shops would be too small anyway). They make their store a convenient one stop location, with a pharmacy, restaurant, photo place, post office, books, electronics, food store and retail store... and then slowly just eat away at the other guys. They have done this in numerous countries around the world. There is a reason why the Walton family is the richest family in the world. They know how to do business. The other South African chains don't stand a chance.
DreamKing
Honorary Master
if they "buy" share from "monster", they are the "monster" too, what competition we have?
LazyLion
King of de Jungle
If they are coming, then you can bet that their competitors are not far behind... Sam's Club (also owned by the Walton Corp.), Target, K-Mart, and Food stores like Bi-Lo, Safeway, Krogers, etc.
Our local stores might die out... because there is no way in the Universe they can ever hope to compete... but Walmart's presence will attract the other big players.
I love how you all think that they will just come in and be a massive success. Wallmart has failed in quite a few countries in getting a foothold. Most notably Germany and South Korea.
Just because they are huge doesn't mean they will automatically be a success. Just look at McDonalds in this country: Last I've heard McDonalds SA has been sold off to a local company, because McDonalds International didn't see us as a growth market anymore.
LazyLion
King of de Jungle
There is a biiiiiig difference between the South African economy... and economies like Germany and South Korea.
Walmart's value is around $196 billion... South Africa's GDP is $277 billion. They could buy out every retail chain here if they wanted to.
Germany's GDP is $3.36 Trillion and South Korea is $929 billion.
They have the muscle power... now it's all a question of strategy.
Walmart is the 60th biggest company in the world.
Chicken Boo
Senior Member
This is no small aspect of their business strategy.
Massmart or Shoprite, I guess it would depend if they want to be a rival in the food sector (i.e. vs PnP) or just stick to goods. I re-read the article and it seems they are looking for someone to buy here to get a foothold. Just coming along and starting up their own stores would lead to a big fail, makes no sense.
Take over the leading ass-raper and commence culling small-time business, easy profit.
Let's just take a moment to remind ourselves that of the top 10 wealthiest people in America, positions 4-7 are occupied by members of the Walton family (http://www.forbes.com/2009/09/29/forbes-400-buffett-gates-ellison-rich-list-09-intro.html). If Walmart come here it's not to satisfy a market hungry for lower prices, or provide healthy market competition or anything of the sort; it's to take South African's money.
DreamKing
Honorary Master
as I said before you have no idea how it works in SA.
don't think they are really earn you a lot of what they are selling. Mark up price is approximately 30% ONLY. Do you know how much is the importers have? Less than 10% ( what I mean is the REAL importers). By cutting cost, big retailers will join forces with importers and local producers to fix a guarantee profit price. (Let say 30%) On the other hand, the importers will increase their selling price to other retailers (retailers that not part of the biggest retailers circle). Those retailers will be charged 35% plus VAT (about 49% mark-up) extra mark-up. In the other words, small retailers will have to spend 20% more expensive from local importers than to buy stock from local biggest retailers. (what a joke :wtf
You NEVER can make competition to those people. 1) I don't think Wal-Mart will lose their money to enter SA market.
2) I don't think importers and producers will lose their "good" relationship with local retailers.
3) I don't think current labour laws and policies will attract foreign big company to risk their money to invest SA.
Conclusion: competition in SA is still a DREAM.
*SynergyX*
Expert Member
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the kind of products people would expect from walmart....would cost them premium to firstly import it into the country due to our beloved government retrictions....so i wouldnt be to excited for them being any dfferent from makro, game and the likes