Friday, August 1, 2014

Different China Stories for Walmarts in Zhanjiang and Changde

Several months ago in Zhanjiang's Chikan district I saw a Walmart in a shopping center next to the Nanqiao River.

Walmart in Chikan, Zhangjiang, Guangdong

Partly because Walmart has over 350 Supercenters in China and last year announced plans to "open 110 new stores in China between 2014 and 2016", I didn't find it remarkable. I had already seen a number of Walmarts in other Chinese cities.

What was remarkable, though, was that only about 300 meters (about 1000 feet) away I saw another Walmart.

Another Walmart in Chikan, Zhangjiang, Guangdong

I had never before seen two Walmarts so close to each other. The second store appeared newer and was clearly more spacious, although they both seemed to sell the same breadth of goods. Employees at both locations said they were not aware of any plans to close either store and the two locations were needed given customer demand.

These two Walmarts stand in contrast to another Walmart I saw more recently in a city over 15 hours away by car to the north – Changde.

Walmart in Changde, Hunan

The store was remarkable to me for a different reason. It was the first Walmart I have seen in China which had been closed down.

flowers for sale in front of a closed entrance for a Walmart
A closed entrance now serves as the backdrop for a flower stall.

The store is also remarkable because, as reported by China Labour Bulletin, in June a local arbitration committee:
formally rejected a compensation claim by Walmart employees who were laid off by the company following a store closure in March. The local authorities meanwhile have been putting intense pressure on the workers to accept an unofficial settlement offer from Walmart of an additional 3,000 yuan [US $485] each.
As Xinhua reported in July, the local authorities weren't entirely successful:
Since then, 63 workers have signed an agreement to accept a settlement from Walmart of 3,000 yuan (488 U.S. dollars) each in addition to the compensation package to end the dispute.

The remaining six workers were not satisfied with the arbitration and insisted on filing lawsuits.

"We don't feel respected in the whole process," said Huang Xingguo, head of the store's trade union.

"Even though they (other workers) accepted the settlement, they are forced by living pressures, not by their will," he said.

At present, the trade union of the store and four former employees have sued the Walmart store in separate lawsuits, and the five suits have been accepted by the Wuling District people's court, he said.
Whatever the results of the lawsuits may be, the closed store is part of Walmart's restructuring for its overall growth in China. As the stores in Zhanjiang, planned new stores, and the choice for Walmart's new CEO—the previous head of Walmart China—better reflect, Walmart still has big hopes for the Chinese market.

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