Wal-Mart's China Adventures

http://www.msnbc.msn.com/id/27241451/

From this story, we can glean several important facts about doing business in China.

1. Chinese people, just like any other people, want low prices and convenient shopping. Stores like Wal-Mart can do well there because it offers both these things at a level no one else can. Also, because it's a foreign brand, it also has an aura of "legitimacy." The average shopper can brag to his friends, "hey, I got my stuff from Wal-Mart. Yeah, that's right, I do my shopping at an American store. Hoo-rah." The ownership of foreign items is a status symbol.

2. Chinese people are not sentimental about Mom-and-Pop shops. If they can't compete, oh well. Maybe they should try to find some other way in which they can be better than Gigantic Corporation. Chinese people are, however, sentimental about Mom-and-Pop themselves. Hence, they will continue to support local vendors, especially if they've known said vendors for a long time and have built up a relationship with them. So get to know your customers. They'll bail you out when times are hard.

3. China is big. You don't have to be an industry leader to make money. The cities where Wal-Mart is expanding may be "small," but they still have "only" a couple million people. In the words of Premier Wen Jiabao, "Any small problem multiplied by 1.3 billion will end up being a very big problem, and a very big aggregate divided by 1.3 billion will come to a very tiny figure." Even if you only have 1% of the market, that's still a lot of profit.