why don't we see the rise of China-based Amazon-type competitor to Walmart?

In My Humble Opinion (IMHO)
#1

AFAIK there are lots of items that sell in Walmart that could be bought without directly examining them in store, if good enough online info were provided to compare and contrast them to other items of a similar type. Also, lots of those items are made in China anyway and probably are available there cheaper than anywhere else.

So, why don’t we see an Amazon-meets-Walmart operation in China that would allow customers to assemble a big shopping cart of such items, put them together in a big box in a fulfillment center over there (cheap labor, no expensive American execs, convenience of a huge fulfillment center with more merchandise stocked than any particular Walmart) and then ship it by slow, cheap sea transportation to the customer - initially to the Pacific port cities (Singapore, Tokyo, San Francisco, Seattle and so on) and subsequently further inland by truck, if the idea catches on. If last mile delivery by local mail proves too expensive because of mails tendency to waste money on unionized employees, they could deliver by their own truck to distribution centers, which could be basically a storefront similar to UPS store, where the customer would pick up by himself by car.

So why don’t we see something like that in all its glory already? There are certainly some dropshipping operations from China out there, but they don’t qualify even as a parody on actual Amazon, let alone a true Walmart equivalent.

#2

I think the biggest thing would be the long shipping times. Also customs. I am totally disgusted with WalMart. Our local one seems less and less likely to have what I want. I recently needed a battery for my watch, not something I would wait for to come from China. WalMart didn’t have the one I needed. If if have to run around several places to get a few things, Wal*Mart may not be one of them.

I suspect Amazon and Ebay are killing Wal*Mart on the bigger stuff. Shipping kills them on the smaller stuff.

#3

Has China got got such stores? I would have expected that a country that size would have them, and that they’d cater to China’s 1.3 billion people. And would be in Chinese, which is probably why we don’t see them.

That’s a massive market - big enough that places like the US might be viewed as possible extras, but certainly by no means the core market.

Any Chinese people here?

#4

Deal Extreme is something like what you want. Some of the stuff is cheap garbage, and I suspect some of the stuff is counterfeit. As long as you are careful, it is a good site to order from. However, they will sell you matches, rare earth magnets, and tritium gas; I’m not sure if you are allowed to mail the first two, and I think the third may be illegal to import. I’m not sure I would trust DE to keep me out of trouble, but they are good for things like blue-tooth and data-cables.

Here are some helpful translations:
Funny = Penis
Thing = Penis
Great Gift = Penis
Toy = Penis
Friend = Penis


http://www.dealextreme.com/p/japanese-hand-carved-boxwood-lovely-mimic-thing-netsuke-pendant-40690
http://www.dealextreme.com/p/funny-cell-phone-strap-28631
http://www.dealextreme.com/p/spray-your-friend-giant-water-gun-water-spraying-toy-15185
http://www.dealextreme.com/p/soft-silicone-stress-reliever-toy-assorted-colors-12043

Take a browse - they sell a lot of non-penis items: like this
http://www.dealextreme.com/

#5

yes, long shipping may be an issue, at least for quicker purchases. Although, I think, for sufficiently cheap prices we can easily see people stocking up for the long term and waiting as long as it takes. Well, so maybe one of the fulfillment centers for North America should indeed be located closer to home, whether in Mexico or in a cheaper locale on US West Coast in order to accommodate people willing to pay for faster shipping.

What about the customs bit? Is customs going to go inspect every package? How does customs inspect stuff that Walmart imports in bulk anyway?

#6

Not Chinese, but how is what you’re imagining different from this?

#7

Why would they want to? Why deal with all the hassles and costs of dealing with customers when they can just sell their stuff to Wal-mart and Amazon and have them do it.

#8

I agree that there are already online stores, including ones that ship direct from China. LightInTheBox.com electronics store seems to ship from China, at least shipping takes real long there.

Perhaps this thread should be understood as a discussion of “why hasn’t this industry grown to Walmart scale and success”. Because it clearly hasn’t, at least not here in America / English language internet.

Some hypotheses of my own, FWIW:

  • existing stores are small, do not hope (rightly or wrongly) to “make it up in volume” and so stick to excessively high markups based on high markups of their competition. So, in a sense, a sticky price phenomenon is holding back the industry

  • by being small and hence non-swing-buyers and lacking experience and accumulated knowledge of Walmart procurement department the existing stores are not able to buy the merchandise sufficiently cheaply in China. IMHO this point has a lot of merit, but it may also be that prices here in America are so inflated compared to China that they could do very well even without “buying the Walmart way”.

  • existing stores don’t know how to advertise their wares well enough online in a “medium is the message” type of quality way. I am yet to see an online store that would give me the same level of information exposure that I can find by walking around Walmart or Fry’s or similar big store, even for items which do not need to be handled manually like clothing. It’s not like creating such a store would be violating of the 2nd law of thermo, but for the time being, if such exist, I haven’t see them. Well, and maybe Chinese are not adept in designing this sort of stuff anyway and there are no foreign models to copy for the time being.

  • low cost package delivery from China to other places on the Pacific Rim is not sufficiently commoditized and hence would need to be setup from scratch

  • customs will rip up every package at the port and charge a huge fee for doing that

Well, some of these hypotheses probably have more merit than others. So come and join my battle against ignorance of international low cost retail sales :slight_smile:

#9

I was going to say that. DealExtreme.com has an expansive selection (of gadgets and fairly geek-centric stuff). There are also a number of other similar sites that offer roughly the same goods. As long as you do not mind waiting 3-6 weeks for delivery, and have no intention of returning any items, you can get a great deal.

#10

I’m still not totally sure I understand your expectation. Are you asking why online shopping in general hasn’t scaled to the point of a Walmart, or why all infrastructure around online shopping hasn’t migrated to China?

Amazon in the US isn’t anywhere the scale of Walmart either - it takes time to grow the infrastructure, supply chains, and customer trust and familiarity to gain that kind of scale.

If the latter, I’m pointing out that it has, but that it’s oriented at the local market. I’m not sure there will ever be Walmart-scale demand in the US for a website located in China, from which you can only order things made in China, and then not receive them for 6-8 weeks.

#11

Have you actually had something shipped to you, as an individual, from an overseas company? It’s a lot more hassle than getting something from Amazon or Wal-Mart.

First, there’s the shipping time, as has been mentioned. For cheap transportation it can be measured in months.

Second, there’s the time and expense to get it through U.S. Customs. It can be unpredictable. A “big shopping cart of items”? It may be held up for weeks while they figure out how much duty you owe.

#12

the shipping hassle is a valid concern but not when buying for long term. If I can spend $100 and get twice the amount of useful merchandise by avoiding paying for all the inefficiency of the Walmart-of-today (I guess all organizations decline and get dumber / greedier / less efficient in time, and Walmart is no exception) then I can wait.

Also, the “months” part sounds like poorly designed logistics. E.g. here http://wiki.answers.com/Q/How_long_does_it_take_a_cargo_ship_to_cross_the_pacific_ocean they claim that a cargo ship crosses the Pacific in two weeks. Well, let’s say a month for the port hassles and 3 weeks if we are lucky. 3-4 weeks is not a long time to wait on non-essential purchases.

For the customs handling of international package shipping question I will start a separate thread to avoid overloading this one. This indeed sounds like an interesting and relevant issue, thanks for bringing this up.

#13

maybe Amazon is not on the scale of Walmart because shipping by mail is unduly expensive.

Also, I think their (and many other American execs’) psychology and modus operandi is one of “how do we shake down the customer for the most money” as opposed to “how do we cut the markup to the smallest possible amount and get a whole lot of satisfied customers”. Case in point is here http://www.bizjournals.com/seattle/stories/2000/09/25/daily21.html . If this is how their managerial team thinks about the world, it’s hard to expect from them a sustained drive for greater efficiency and savings passed on to the customer.

Now, hey, if they succeed in this for the time being, good for them, but the market niche for a truly low cost online retailer might still be unfilled. As you may recall, Walmart originally succeeded precisely by smashing greedier and dumber competitors by cutting the markup rather than using legerdemain, marketing lies, creative pricing and so on to nickel-and-dime customers.

#14

I don’t think that’s actually the case, but nonetheless I continue to struggle with what question you’re really asking here. If you thinking shipping by mail is unduly expensive, how could you expect what you describe in the OP to possibly work?

#15

The question then becomes: how many “non-essential” purchases do people actually make at Wal-Mart? How many things do people buy at Wal-Mart that they really plan in advance, and are willing to wait weeks to receive? How deep a discount would your proposed Chinese retailer have to offer to get people to switch?

We’ve gotten used to being able to purchase something online and have it within a few days, at the most (or, of course, just buy it at a brick-and-mortar retailer and have it immediately). Don’t underestimate Americans’ desire for immediate gratification.

#16

Lots of reasons.

Many people like to shop where they can see and touch the product.

Some products are perishable and don’t lend themselves to the kind of aggregation you are describing.

Some of those “expensive executives” at wal mart know what they are doing, better than most anyone else. Expertise matters.

Delayed gratification is not everyone’s cup of tea. Sometimes, you just need so get something faster than it can be shipped from China.

There is a reason wal mart doesn’t have a majority of the retail market in the US. Different strokes and all. No matter what business model you design, you are not going to be the only game in town.

And by the way, where do you think wal mart gets much of it’s priest anyway?

#17

Um, someone “products” auto corrected to “priests.”

#18

A priest, a Walmart executive and a Chinese entrepreneur walked into a bar… :stuck_out_tongue:

sorry

#19

Their sales are down in the sort of economy they used to do well in.

#20

How would that be any different from buying from Wal-Mart, except you have to wait three weeks for your product, you can’t see it in person, and it costs more?