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Global Marketing

Why Walmart is failing in Japan

Walmart is the largest retailer in the world, with revenues reaching 523.96 billion in 2019. They have been able to succeed in multiple countries, but have not had success in all. One of these failures for Walmart was in Japan.

Walmart's presence in Japan was created by purchasing a stake in Seiyu, which was a Japanese grocery store, in 2002. By 2008 they fully owned this company. Seiyu's model was based on “Everyday Low Prices” similar to Walmarts model. Even with Walmarts brand recognition, they have not been able to get a good market share in Japan. Currently, Aeon owns 45% of the market share while Seiyu is only 12%.

The main reason for this is that Japanese consumers are not as interested in the low price strategy as Americans are. Japanese customers enjoy hunting for good deals, and will go to multiple stores trying to find a good deal. Another reason for the lack of success is that Japan's market was already very congested with many supermarkets as well as mom-and-pop shops. Lastly, Japanese consumers enjoy fresh and locally sourced food, and Seiyu does not offer much of that.

This shows that many different countries have different preferences when shopping. While people in the U.S. like to bargain shop all in one place, this does not work everywhere.

Works cited: https://www.mediabeacon.com/en/blog/case-study-social-understanding