2007-11-24, China's View of Wal-Mart: Big Partner 2

Several hundred employees worked at the peculier center keeping the import pipelines 1 full.
Walmart gives the chinese suppliers the specifications 2 for Walmart products.And they teach those suppliers how to meet those specifications.They have to do with price. They have to do with quality.They have to do with delivery schedual. So in a sense, Chinese suppliers learn how to export to US market through large retailers 4 like Walmart.
The chinese suppliers also learned just how tough Walmart can be.
Walmart is very shrewd people ,you know. That they have the orders behind them and they go into almost demand.These are the what I need.
K ,Chan is HK entrepreneur, who used to supply Walmart.
I've even heard when sometimes they called in through three or four manufacturors. and negotiate and say this is what I want.
They bid the price as low as possible. What did they do?
Basically, they bring people into their officies and just put product initiative everybody bid their cost on the product. And it's very high pressure.
Have you ever been in that situation, where you have to bid with 3 or 4 people in a same room.
Yes, I have. One of the things I was involved there ,of lesson,clearly probably,at most ,may be less than 1 dollar.
So they're pounding on a few pennies.
Yes , we are pounding ,in a lot of cases just one penny.
The argument is that this is getting a big deal for the consumers. Do you buy that? Or do you say..
No, it get a big deal for the retailor or importer.
For the Walmart.
Yeah. For Walmart ,for the targets who ever does it.
I heard about Chinese producing cheap low in consumer goods. What was striking to me was how many chinese companys were going high-tech 5. You may not have heard of TCL. But you've seen their TVs and maybe bought them marketed under brand names like Philips and RCA. And you'll be hearing more from them soon. They have a wide rang of modern electronic products. And they've just merged 6 with the French electronic giant Thomson together as the largest TV maker 7 in the world.
99% of our exports are for North America and Europe where we make a large part of our profit. We need to fullfill the demand of our foreign customers.
And only one US customer, it turns out really matters to TCL.
Sending to Walmart accouts for all our sales to the US market.
Walmart keeps a very low immentory and a fast turn around which forces us to speed up our production to catch up with the international market.
It was a familiar reframe I heard it everywhere.Wrapping up production ,supplying Walmart, shipping 8 to America. And at ShenZhen's main port , I saw a river of exports. 10 years ago, this was all barrow land. Today ,Shenzhen is on the verge 9 of becoming the 3rd busiest port in the world. And Walmark is one of its biggest constomers.
Walmart has a very close relationship with China.China is the largest exporter to the US economy in virtually all goods categories, Walmart is the largest retailer 3 in the US economy in virtually all goods categories.
It sounds that like commercial marriage made have it.
Walmart and China are joint 10 venture and both are determined 11 to dominate the US economy as much as they can.