The Japanese market has seen increasing retail competition among fast fashion chains like H&M, Uniqlo and Forever21 over the past few years. But rather than building its own brand in Japan, Wal-Mart bought the failing discount department store Seiyu in 2002. Stores were quickly injected with Wal-Mart’s signature low, low prices in an effort to appeal to Japanese consumers, a group as easily wooed by bargains as they are by luxury goods.
The stores stock items ranging from an imported bottle of French red wine (450 yen, around $6) to jeans (850 yen) to bento boxes (298 yen), all of which feature prices comparable to its lower-priced competitors.
Since its purchase, Seiyu has grown to 414 locations in Japan, representing the Wal-Mart’s largest Asia-based investment yet, according to the Wall Street Journal. And after experiencing decreasing sales for almost eight years in a row, Seiyu is finally seeing results: annual revenue reached $13.4 billion in 2009.
International business accounts for one-quarter of Wal-Mart’s annual revenue of an estimated $405 billion. And Seiyu is not Wal-Mart’s only side-project: the company plans to work similarly in neighboring China and India in the near future. “We want to take over stores where the current operator is not successful and wants out, or acquisitions that fit our model and are not troubled,” said Scott Price, president and CEO of Wal-Mart Asia.