By Frank Yu
When I first read about the opening of the new Wal-Mart in Beijing, this one quote really caught my eye: Tiankelong has tried to fight off Wal-Mart and did lots of promotion and discounting activities. But Wal-Mart seems unbeaten with one kilogram of watermelon selling for 1.1 yuan, compared to Tiankelong's price of 2.5 yuan, later discounted to 1.5 yuan.

"Crush them." –General Grievous

Star Wars: Episode III–Revenge of the Sith (2005)

Given that I work literally across the street from the new Wal-Mart near Zhichun road in Haidian, a field trip to examine the Chinese version of the retail juggernaut that has changed the American shopping landscape was in order. In many ways, Wal-Mart and the other foreign hypermarts may have similar effects on the Chinese nascent retail market as well. The prospect of buying cheap melons excited me.

Having been open for only a week, the excitement around the new Wal-Mart was just beginning with rumors of aisles upon aisles of foreign foods difficult to find in China Most of all we were quite curious to see what kind of American comfort food would be available to choose from. Without hesitation, in the next few hours, a few colleagues and I set out to see this new wonder that has arisen in our neighborhood.

"The shroud of the Dark Side has fallen. Begun, the Clone Wars has." –Yoda

Star Wars: Episode II–Attack of the Clones (2002)

There was previously a Wal-Mart clone in Haidian called NMart that had similar brand and logo markings as Wal-Mart but was a Chinese domestic hypermart. After being open a few weeks, the brand new NMart mysteriously closed. The buzz (and unconfirmed) was that perhaps an "unnamed large retailer" that comprises a significant chunk of Chinese export GDP had complained about the clone. As fast as you can say "Jango Fett," NMart was closed never to be reopened again with the building now sporting a Nirvana Fitness Center banner on the outside. For all the other Wal-Mart-like clones in China, these apprentices are mere younglings when compared with the master of retail.

"Look at the size of that thing." –Wedge Antilles, when approaching the Death Star

Star Wars: Episode IV–A New Hope (1977)

One thing that the Beijing Wal-Mart shares with the American Wal-Mart is that many of the products sold inside were made in China. Around the store are sprinkled promotional posters of Sam Walton and happy red frocked employees smiling at customers as they board escalators. One of the posters exclaims "Welcome to write our president!" The 3 floors of space is immense and they still have not finished developing another floor at the top. The all-your-shopping-needs experience of the US stores have ported well to Beijing.

However, as expected, the product range within has been localized for a Chinese lower to upper class target market. At the grocery level one can find a dazzling selection of local and foreign products arrayed nicely along the aisles. Cheese, lovely blocks of cheese, rare in local supermarkets can be bought at Wal-Mart with more than one brand. One can also purchase a whole side of beef at Wal-Mart or at least big hunks of it. Since I am not one to quibble about 1 or 2 yuan, I can not say that it was cheaper than the hutong butcher, but it looked a lot cleaner without the flies and the rancid smell.

Although I did not buy any food, I did end up buying a small fan for the office. Actually, I tried to buy one before at one of the local electronic retailers in Beijing but it seems that the margin was so low that the store decided not to stock cheap plastic fans and instead sell air conditioners. However, at Wal-Mart, they did have a nice selection of fans since volume was the name of the earnings game. I found a great one that looks like a sad penguin for a mere 39 yuan. I am sure that I may do more of my shopping here in the future for even basic household goods just because the selection, quality, and price matches that of local shops.

"Twisted by the Dark Side, young Skywalker has become." –Yoda

Star Wars: Episode III–Revenge of the Sith (2005)

One chilling discovery during the visit came when we went to investigate the DVD movie selection aisle on the first floor. Along with the usual local Chinese movie DVDs encased in hard plastic box packaging, there were also foreign DVDs polywrapped in plastic with simply the cover sheet and the DVD inside packaged in the same manner that pirated DVDs were sold in China. Most surprising of all was that the price of Disney's Dumbo was only about 6 yuan(that's less than 1 USD). Pirated DVDs from other Beijing stores cost about 10 yuan while poor-quality street versions cost about 8 yuan. These DVDs were cheaper than the pirated versions sold around Beijing. I cannot confirm if those in the store were actually legitimate or not, but given the price and packaging I would make a guess that they were not. I should not be surprised since pirated DVDs have been found to be sold in Chinese post offices and government buildings by vendors who set up a table inside. Since almost all retailers in Beijing seem to do the same thing as well, one gets desensitized to the practice until you realize that this is Wal-Mart.

"Impressive. Most impressive." –Darth Vader to his son Luke Skywalker

Star Wars: Episode V–The Empire Strikes Back (1980)

Overall, shopping at Wal-Mart Beijing can be described as a pleasant experience. The seed of the transformation of the Chinese retail space has been planted and with it the bar for quality, service, and pricing has been raised. Wal-Mart ranks as one of the great global consumer brands of the world like Ikea, McDonalds and Starbucks. How this giant morphs or adapts to the China market will be interesting. More exciting, how this juggernaut will change China and the Chinese consumer is still unclear. Yoda says it best to describe this disturbance from the normal balance of things, "Always in motion is the future."

About the author:
Frank Yu is a Program Manager at Microsoft Research Asia's Advanced Technology Center. A Harvard graduate, Frank has worked in Hong Kong, Singapore and now Beijing for 8 years in the field of technology and banking. Views expressed in this article are those of the writer and not those of Microsoft Corporation. Frank can be contacted at [email protected]