Filed under: Competitive strategy, Wal-Mart (WMT), Russia
Even though I touched on this subject last summer, it seems that speak has resurfaced about Wal-Mart Stores, Inc. (NYSE: WMT) probably entering the Russian market soon. That country’s economy is set to expand in a one-of-a-kind way over the next decade, and as such, Wal-Mart would love to be there to capitalize on the growing need for retail products of all shapes and sizes.
Russian could be one of Wal-Mart’s greatest opportunities — even as lucrative as the India and China markets it is currently operating in. A lack of discount retail competitors with global finesse and pricing power gives Wal-Mart a golden chance to enter the Russian market and become entrenched as the “go to” retailer for mush of the country’s consumer retail needs. Will Wal-Mart take a second look? It’s way past that, and all indications are that it will be in Russia by 2010.
Russia’s status as the world’s largest crude-oil and natural-gas exporter should help a rising middle class grow while Wal-Mart takes the time to study and enter the country’s marketplace in the smartest fashion possible. And, from the grocery end, Russia’s $145 billion food retailing industry takes in half of all consumer spending. Rising incomes may boost demand for better food products, and that is where Wal-Mart will come in. Either by itself or with a retail partnership (like in India and China), Russia should prepare for the “massive box” soon.
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