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Wal-Mart to close last Korean branch
Publication Date : 22-01-2013
Wal-Mart has decided to suspend the operations of its remaining Korean operations as of the end of this month, according to industry sources on Monday.
The brand had served as the purchasing department for the US-based retailer that handled the purchase of Korean products.
In 2006, Wal-Mart pulled out of Korea after selling its shares and stores to E-Mart, citing a difference in corporate and social cultures that prevented the company from expanding its operations here.
But it had left behind a branch that will now also be officially closed in the near future.
Industry sources said that once the branch was shut down, the headquarters in the US would handle purchasing as well, meaning that the last connection between the company and Korea would cease.
However, some interpreted the move as signalling that Wal-Mart would be starting from scratch in Korea.
Other foreign-grown retailers, such as Home plus and Costco, have been busy carving out a piece of the Korean market, which draws a sharp contrast to the failure that Wal-Mart experienced more than half a decade earlier.
“Many had said that Wal-Mart had come before its time in Korea, and that perhaps the consumers are now more ready,” said one industry watcher, who declined to be identified. “At the same time, we can also believe that Wal-Mart, if it’s ready to attempt a second time, would be more armed (with knowledge) about the consumer and retail culture of Korea.”
Those close to Wal-Mart’s remaining Korean branch, however, said the business suspension should not be overestimated, and that there were currently no plans on the table for attempting reentry into the local markets.
Korean companies, meanwhile, have been making headway in foreign retailers, namely Wal-Mart, by directly working with headquarters.
Nongshim, for instance, has recently signed a deal to directly supply Wal-Mart in the US, through its US office, Nongshim America.
Industry watchers said this trend might stick as more companies were opening overseas branches or offices to directly deal with clients there.