So I’ve got some exciting stories to share with you after these past couple days! Since the last time we talked, we went to Guangzhou, Shenzhen, and now we’re in Beijing. We’re moving faster than a cat with its tail on fire, hopping city to city like a frog over lily pads. It’s starting to get me more turned around than a Texas twister, so let me see if I can unravel these memories a little bit. Let’s start with Guangzhou…
Guangzhou: The big things I
think of with this city –
- Super cool hotel – Marriott I think (our card said elite on it, that’s how we knew we were special)
- Christy’s Group fabric sourcing locations
- Christy’s factories
- Great Chinese food (discovered on our own!)
I’ve actually already
included a little bit about the factory visit in the last blog (which was out
of order, but it
One thing I didn’t mention, though, was the fabric market we visited
with Christy’s that they use for inspiration for the fabrics they use in their
costumes. This place was incredible, it
had seven stories of shops dedicated to fabric and clothing accessory items
wall to wall, floor to ceiling covered with cloth samples. Every once in a while, we would see a bike or
motor scooter come by with a load of fabric for some shop or customer. The fabric roll would stick out three feet on
either side of the scooter, and I could just imagine what one of those things
would feel like sweeping your legs out from under you as a scooter whizzed
past.
fit with Christy’s group).
Another great memory from Guangzhou was a dinner we got the one night we were in the city. A couple of us, Michael, Yang, and Cole to name a few*, got adventurous and walked the streets till we found something that looked interesting and Chinese. We ended up at a traditional place and ordered about 10 dishes. And of that spread, I liked 10 dishes. That is still one of my favorite meals that we had on this trip.
*Michael Moose (yes, his last name is Moose) was my roommate for the first week of this trip. Cole, a fiery red head, is my current roommate – random fact about Cole, he can do 31 pull ups in a row. I woke up in the middle of the night last night and saw him doing one-handed push-ups while balancing a full grown elephant with his other hand. Or maybe that was a product of the weird sweet and sour chicken I had yesterday… Yang is a Chinese international student in the MBA program at the U of A, and as Jose likes to say, “one of the best assets we have on this trip”. Yang has probably saved us from ordering roasted bull frog tongues when we meant to get broccoli beef – he’s great about helping us order all our food.
Shenzhen: Notables from this city…
- Walmart China!
- Sam’s Club Visit
- Walmart “Hypermart” visit
- Chinese Distribution Center (way more people, way less automation than America)
- Doll factory, lots of cute finished dolls (but creepy doll heads to start-see photo below)
- Wutong Shan - which translates to Wutong Mountain
- Fun night life, cool rooftop hotel pool (laser pointers, haha)
Shenzhen was very neat, we stayed there a couple days and did several
business visits, including the high profile Walmart China visit. Since that was
the first thing we did in Shenzhen, I’ll go ahead and start with that one.
We got some first class treatment
from the folks at Walmart, and had the amazing opportunity to learn about what
their business in China looks like from a group of top management, including
several C-level individuals. One of our main contacts for the day was John
Furner, the chief merchandising officer for Walmart China. I could go on for
quite a while about the things we got to talk about and listen to during our
2.5 hour session with these guys, but I’ll just hit some highlights here. One
of the running themes we heard about from several of the presenters was a
“Three Year Journey” that Walmart China has been on. Essentially, during the early periods of
Walmart’s growth in China, they had been focused on nothing other than
expansion – throwing out new stores and trying new formats. The idea was grow, grow, grow, and worry
about the rest later. Well, it so
happens that later is now, and it has been up to Greg Foran (Current WM China
CEO), Sean Clark (Future WM China CEO) and their team to worry about all the
details and consequences of their growth.
Walmart China got away from many of
the principals that made Walmart great during the growth period, and so one of
the corrective measures that the company has been on has been called the “Three
Year Journey”. This included going back
to the basics of what Walmart is, pushing to change the organizational culture
as well as achieve strategic competitiveness on items like supply chain and
EDLP. John Furner described the change
in organizational culture as one of the most challenging aspects, saying that
it has been difficult to get buy-in on some important vision items. For
instance, in Asian culture, it is very normal to push responsibility and
decision making up the ranks to the top dogs, creating long lines of
communication and using lots of time.
One of the things Walmart wants to instill in its managers is a sense of
decision making empowerment and initiative. But, because of language and other
cultural barriers, Sean Clark described that unless that process was done carefully,
the company sometimes got results they weren’t asking for or expecting.
However, the three year journey, which they are in the third year of now, is
showing some promising results. Moving
forward, one of the things that Sean Clark described was that he was hopeful for
in the future of Walmart China was a layer of Chinese leadership that the
current group of leadership is bringing up.
It is pretty inspiring to see how seriously these guys consider the
values of leadership, integrity, and quality that Walmart promises to try to
deliver, for all stakeholders in the company.
After the time in the office, John Furner led us on a couple store
visits that were very neat. First, we
went to the highest grossing sales Sam’s Club in the World – located right
there in Shenzhen, Texa- I mean China (wish it were Texas though, we need to
step our game up!) But really, though, for a Texas Sam’s to surpass this Sam’s
club’s sales, it would have to do more than 6 times the sales volume. For a quick idea of the sales of this store, Mr.
Furner said that during the Chinese New Year festival season, it would do
between 1 & 2 million USD in sales daily.
Moving on from Sam’s
we went to a Chinese “Hypermart”, which is the equivalent of a U.S.
Supercenter. This store was actually a
pilot store for Walmart China where they were testing a new marketing scheme
based on the Chinese phrase “Sheng Xin Jia”. Which translates to “Pretty Pig’s
House” – oh wait, no, that’s the wrong tones.
That would be “Sheng Xin Jia” (hope you read it with the right tones
this time) which comes out to “Worry Free Price”. So as they are pushing this
message, they have designed a signs and posters that will hang in the stores to
broadcast the fact that Walmart China has some of the most competitive prices
in the market - one of the results of their “three year journey”.
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| Hypermart shoppers |
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One of many sea-food items
for sale in Walmart China |
The final segment of
our Walmart visit was to one their Chinese distribution centers. This was a massive warehouse about an hour
and a half outside the city. Unlike U.S. Walmart DC’s, the reliance was on
people, not machinery, to get the work around the facility done. There were
stacks and stacks of everything, in proportions such as only Walmart achieves,
all through the warehouse. One of the interesting challenges that Walmart faces
logistically in China comes from the goods transport systems. For the most part, everything is shipped in
boxes that are stacked directly on the floor in trucks, requiring hand loading
and unloading labor. The reason for this
is that in China, there are 53 standard pallet sizes for goods, and that’s just
the standard sizes. A funny story that the supply chain VP, Lesley Smith,
shared with us in the Walmart office was about the work she’s done trying to
get things transitioned towards moving goods on pallets. She said won an award for “Innovation in
Logistics” from the Chinese government for coordinating with a detergent
shipping facility located across the parking lot from a Walmart DC. She asked
that they ship their material on pallets rather than floor loading the truck
before driving it across the parking lot. Lesley didn’t feel like she did much,
but said a trophy’s a trophy, so she’s not complaining!
So that was Walmart, and that was great.
And
I notice that this blog is getting way too long, so I’m going to try to wrap it
up pretty quickly, and write about Beijing another time. The other cool things
we saw was a doll manufacturing facility and during a free afternoon we went to
a mountain near Shenzhen.
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Unimproved doll heads that Citi Toys starts the doll making
process with
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The doll manufacturing plant was incredible. This company, Citi Toys, provides
dolls (about 24 million a year) to Walmart, Target, and Toys R Us, among
others. This plant, like many Chinese
manufacturing facilities, also provided housing for their more than 2,000
production employees. While walking from
one building to another, a production shift ended and a lot of the employees
headed to lunch, walking past our group to get there. I’ve never seen an army
of doll makers before, but now I know what it looks like.
The last thing I’ll mention is our trip to Wutong Shan. This mountain was a popular attraction in a national park near Shenzhen that we found by looking up online. It was a little bit of an adventure getting out there. Our taxi driver didn’t drop us right at the entrance to the mountain road, so I walked onto a footpath that I thought might be promising. It turned out to be a trail to some local housing, and specifically a smiling but confused Chinese woman. She rattled off a couple sentences to me in Chinese that sounded something like questions, to which I replied in butchered Chinese that I didn’t understand Chinese. And she kindly responded with a smile and more Chinese. I said sorry, and because I understood that about as much as what she said the first time, and then asked her where the mountain was. This time, she shot out another couple Chinese sentences and pointed – boom, then we were talking. I can understand a finger pointing at the end of an arm in any language. That got us headed in the right direction, and we were soon on the way to the top of the mountain. The climb to the top was a little harder and longer than any of us expected I think (us being Bryan, myself, and Nicole*), but well worth it at the end. One of the coolest moments was walking into a cloud that was enveloping top of the mountain as we neared the summit. The cloud unfortunately made visibility pretty low from the peak, but we got some great pictures and views all the way up and back down. Overall, another great experience to add into this trip.
*Bryan and Nicole are both business students who have been here with me since early May. As proved by the mountain climbing, both of them are really cool.
I’m excited to write more later, because I’ll be able to describe some
of our time in Beijing, which included a trip to the Great Wall of China! But that is definitely for later. Hope you enjoyed learning a little bit about
Walmart China! I’m sorry I didn’t even get to tell you about the laser pointers
in the square during the evenings in Shenzhen, but now you’ll have something to
ask me about if we ever run into each other in the future. Have a great day, night, or whatever time of
day it is where you are!
Z-man
