“It’s like losing a friend” fellow AYC teacher Berenice remarked as we sat down to dinner with Dani and Mirandy at our usual Thursday spot, a popular vegetarian buffet run by local Daoists. Murming our agreement, all of us felt pretty heartbroken indeed and expressed our disbelief in the closure of the store that had made transitioning to life in Lishui easier.
The Big News
Word leaked about a month ago that our Walmart was to close on April 16, 2019. A document in Chinese that was shared on wechat (see pic at the top) sent shock waves through our town. Authored by the District and Economic Office of the Lishui City Liandu District People’s Government, the document purported a need “to optimize the commercial layout” and offered this apology:
We apologize for the inconvenience caused to our customers and surrounding communities. We always focus on our customers, communities and employees and will do our utmost to minimize the impact on our customers and surrounding communities. We sincerely invite customers to visit our other stores, or continue to enjoy Wal-Mart’s high-quality goods and services through our online platform in Jingdong.
At the same time, the company will ensure that the placement of employees is properly handled, communicate actively with the staff of the store, and sincerely hope that all employees can continue to work in the company. We will open vacancies in all shopping malls across the country, and employees who are willing to stay in the company’s work can choose to apply for the same position. If employees choose other job opportunities, we will also respect their decisions and will arrange reasonable solutions in accordance with relevant laws and regulations.
China is a market full of development opportunities, and we are full of confidence in the Chinese economy and market. Wal-Mart plans to add more stores in China, including hypermarkets, Sam’s Club and Huixuan Supermarkets, to provide customers with more omni-channel services for seamless online and offline connections.
We will do our utmost to minimize the impact on our customers and surrounding communities.
One might ask, why bemoan the closure of one store out of the hundreds available here? New stores seem to open and close with the setting of the sun in this town. There are numerous other places (digital or in person) to shop, one needn’t rely solely on an American franchise in China. This blog post attempts to put into words the appeal Walmart has had in Lishui and the fallout its closure is having on both locals and expats like myself.
Located in the basement of the Jinhui (金汇广场) shopping center on Jiefang Jie (解放街), a busy street connecting to an even busier intersection, Lishui’s Walmart always appeared brimming with customers. Outside, E-bikes (electronic scooters) and regular bikes alike would crowd the sidewalk out front. Throngs of pedestrians and bystanders would force traffic to a standstill on the road outside, while lines of cars trying to enter or exit Walmart’s underground parking were guaranteed to fill the air with a cacophony of shouting and honking horns.
The less-than-ideal location of being in a basement never seemed to be a deterrent to customers. Lots of people would come with their entire family to spend the day as there was much to do at this particular shopping center (bowling alley, restaurants, a children’s playground, movie theater, gym, pharmacy etc). Within the store itself, baskets were often hard to come by as said families would snap them up as soon as they were available.
Another reason the closure announcement blindsided us was that Lishui’s Walmart had just implemented a self-scanning option not even three months back which allowed people to bypass the often long lines at the registers in favor of scanning and paying for all their items by using cellphones. Walmart dolled out this feature in larger cities back in April of last year, and by December it had over 17 million users. I’d also heard there were also experiments with having products delivered through an app in which customers could get their stuff within an hour if they lived within three kilometers (1.86 miles) of the building.
It had felt like great things were in store with our new modern self-service screens overtaking register space at the checkout stands in Lishui. It wasn’t long until the Mall’s fancier basement grocery store, RT Mart, copied the self-scan screens, as stores in China are wont to do.
Lishui’s Walmart was a staple of the community. Everyone knew where Walmart was and where things were in relation to it. It was one of the most commonly used landmarks in town for giving directions. Many locals and expats from outlying counties would even venture there for supplies, choosing to forgo the mall in favor of Walmart’s affordability and convenience.
Having a Walmart in town felt like having a safe haven. Walmart also, with its blend of locally sourced and imported items, seemed symbolic of our living a hybrid Chinese/Western life.
Walmart was also the most convenient grocery store for me at about an eight-minute drive on e-bike or twenty-minute walk from where I live, and I felt could always count on familiar products being there. More often than not, I’d see acquaintances or my students there with their parents. This store helped make Lishui home.
Why did it close?
With this all being said, it doesn’t seem to make sense to close such a beloved store. One of my seventh grade students suggested perhaps Walmart wasn’t getting enough customers, a sentiment Vivian, my middle school coordinator, repeated when I asked for her take on the matter. The convenience of shopping online in China has hurt Walmart as its taken business away. Furthermore, with the opening of Wandi’s RT Mart three years ago in the big fancy shopping mall in the center of town, both Walmart and the nearby night market saw a significant decrease in foot traffic. However, prices remained cheaper (especially on imports) at Walmart than many other options.
Another reason cited by Vivian that Walmart wasn’t doing well is that they charged five kuai for parking. Amounting to less than a dollar, she stated that no one wanted to pay for parking. I can also attest that the parking there was definitely lacking in space. The maneuverability in that parking lot was incredibly narrow, thinking back to one instance where I was a passenger in a car that was trying to simultaneously back out of a tight spot and avoid clipping one of the abundant foundational pillars blocking the view of oncoming cars. The friend driving was also afraid of cars rolling back on the steep exit ramp, so would take time to wait until it cleared out to drive up it.
Another friend, Cherry, mentioned that her town’s Walmart had closed in Quzhou, another town in Zhejiang Province. “Very sad,” she had sulked. I wondered if maybe Walmart was going to focus on larger cities? Students and colleagues loved to repeatedly bring up the idea last year (to my consternation) that we were in a “war between China and USA,” referring to “Trump’s trade war.” I doubted this had much of an substantial effect as to make Walmart shut down its stores as most of their wares offered were locally sourced – they even had factories in the nearby commercial town of Yiwu!
Yet, while the document I cited above stated that Walmart has ongoing plans to open more stores in China, it hasn’t always had smooth sailing doing business this country.
Walmart’s Woes in China: Food Safety Concerns
Walmart has had a rough go through the years with trying to expand into the overseas Chinese market. It first opened two superstores in Shenzhen in 1996. Back then, Chinese laws only allowed three foreign stores to open in a city. This limit was dropped five years later. Imagine, going from basic open or covered stalls fresh meat and vegetables at wet markets to having a huge “big-box” shopping center with nearly everything pre-wrapped. Walmart’s hubris didn’t take into account the needs of its Chinese customers who don’t have the space in their cars or homes (let alone fridge) to buy supplies in bulk.
Many Chinese customers shop on a need-to-buy basis. Their habits lean toward buying fresh food daily. They aren’t accustomed to “buy something and keep it for a month in the refrigerator.” Thus, Walmart has had to adjust its goods. Rather than items covered in plastic wrap on Styrofoam, it offered freshly butchered meat and live seafood. One can have an attendant catch one of the numerous live fish, eels, shrimp, and sometimes frogs or turtles in tanks and have them gutted and cleaned in-store.
Walmart’s also had to learn to adapt to its customers’ diverse regional tastes, such our penchant for vinegar in Zhejiang versus places like Sichuan that really love their heat, in the 117 cities and 25 provinces in which it operates. While Chinese customers also love bargains, some walking miles to another sale in order save a few cents, Walmart’s “Everyday Low Prices” was a major turn-off.
Food safety is a highly sensitive issue in China. Loads of food scandals have rocked the nation through the years, in part due to its expansive and under-regulated food industry, leading the populace to equate cheap items with tainted or low-quality goods.
For example, in 2002, it was found in Guangdong that vermicelli noodles were adulterated with industrial wax and ink. Many restaurants had been condemned for re-using old cooking oil, a dangerous problem as it could spread deadly molds. Another story I had read stated that police had seized 40 tons of beansprouts in Shenyang that had been illegally “illegally bathed in urea, sodium nitrite, antibiotics, and the plant hormone 6-benzyladenine, to make them grow faster and appear fresher.”
These virulent food-safety incidents have revealed a grave situation of dishonesty and moral degradation… Without high-quality citizens or ethical strength, China cannot be a respectable economy or power in a real sense.Premier Wen Jiabao, April 2014 speech to government officials
I vividly remember the baby formula scandal in 2008, where melamine was found to have poisoned over 300,000 babies with at least six deaths. Melamine is a coal-based industrial chemical that can cause kidney stones and renal failure when ingested. In the spring of 2011, hundreds of people were sent to the hospital when hogs from six provinces were found to have been fed toxic chemical additives (ractopamine or clenbuterol) to produce leaner meat. Last year, there were scares amongst pig farmers of African swine flu from feeding the pigs kitchen waste. The list goes on…It’s not hard to see why a lot of Chinese turn towards imports for legitimate “safe” food, even considering American chains like McDonald’s and KFC to be better than local fast food joints.
It should come as no surprise, with the food scares every year in China, that Walmart hasn’t been immune. Walmart had to close 13 stores for two weeks during 2011 in Chongqing when authorities found “regular pork” was mislabeled as “organic.” The business was fined 2.7 million yuan ($412,000). In January of 2014, Walmart had to recall its popular “five spice” donkey meat after tests confirmed traces of fox meat. Walmart’s redone their labeling of products to be even more transparent, especially with organic food. It now cites the province and region they were grown. Most organic foods come from their “Direct Farm Program” that was established in 2007 to give the company greater quality control in its shift towards environmental causes.
Changing its Tune
In trying to appeal to the Chinese masses and combat copycats, Walmart’s changed its motto a few times. In 2010, they decided to advertise just “Low Prices” instead of “Everyday Low Prices.” It changed to “Worry Free,” in 2012, using the Chinese characters for “save, heart, and price” (sheng 省, xin心, jia价) to reassure customers of its quality goods. Moreover 85% of the deals in Chinese Walmarts will outright say how long they last (usually from four weeks to six months) in order to build trust, something Walmarts in the US will probably never do.
Walmart’s reportedly getting along better with the national and local politicians and authorities despite its high turnover of CEOs. I find it all a tad ironic considering Walmart’s founder, Sam Walton, was a super conservative with staunch anti-Communist and Christian values. Vice President Cheney had cited Walmart as “one of our nation’s great companies,” exemplifying “some of the very best qualities in our country—hard work, the spirit of enterprise, fair dealing, and integrity.” In keeping with that idea, I’ve come across stories where Walmart’s refused to play the guanxi game that all relationships in China are essentially built upon and can make or break a business. It remains to be seen what the future holds for Walmart’s 424 stores in China. One thing’s for sure, it doesn’t seem to be in Lishui at the moment.
Walmart, Zaijian (for now)
As the seasonal rains thunder down in Lishui, reflecting our sadness, I do worry a bit that prices will rise further in other stores (namely RT Mart the mall) now that Walmart has closed. So many other beloved places are closing, like my bingsu (Korean shaved ice) place, my dimsum place, and the nearby pizza hut. Sure, one can always count on a new novelty restaurant or store opening, China’s quick about that, but it’s still sad nonetheless. One bright light is that there’s always the convenience of online shopping with two-day delivery when I’m missing the products our Walmart sold.
These are some photos I took on the last day it was open: