Retreat from South Korea
Juggernaut though it be, Wal-Mart can stumble. It just announced it was selling off its money-losing 16-outlet South Korean subsidiary. The buyer is Korean retailer Shinsegae Co., owner of Korea's #1 discount store chain, and the price was $882 million. Wal-Mart had never got more than 5% of the Koran market and growth prospects were dismal.
French chain Carrefour, the #2 retailer in the world, announced last month that it would sell its 32-outlet Korean subsidiary to another Korean retailer, E.Land Corp for $1.8 billion. That leaves UK retailer Tesco as the only global survivor in the Korean market, where it has taken teh #2 spot in retailing.
The withdrawal of the two companies indicates several things:
- Globalization, however powerful, is not inevitable.
- Adjusting to distinct cultural preferences can still be a problem for global firms. (Wal-Mart is having similar problems in Japan.)
- On the other hand, a comnpany like Tesco can get it right in Korea while others fail.
- Successful companies retreat when prospects seem hopeless, to concentrate their effort elsewhere (for Wal-Mart and Carrefour in the far bigger and more friendly environment of China).
12:24:37 PM 
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