Wal-Mart Says Yes to Unions…in China!

Wal-Mart by any measure could be considered it’s own country. The huge multinational retailer employs over two million people and has sales that will breach the Read more

Barnes & Noble vs. Amazon: Long Tail Wins Everytime!

It was with mild amusement that I read Barnes & Noble’s 2nd quarter profits were down 15% blaming it on sluggish consumer spending. The amusement came from Amazon’s announcement in July that their 2nd quarter sales were up 41%.

Why?

It wasn’t that long ago that Barnes & Noble was tearing through the countryside opening up store after store while leaving a bloody trail of mom and pop Book shops in their wake.

Don’t get me wrong, I am for big business as much as the next guy, and I applaud any company that can build itself up from one store to ten stores to one thousand stores and so on. I mean that’s what the American success story is all about right? Companies like Wal-Mart, Starbucks, and Home Depot all started from a single location.

So throughout the 80’s and 90’s the book retailer grew rapidly and it seemed as if nothing could stop it. Then along came Amazon. Amazon took the long tail approach to books that no brick and mortar seller could even consider. But I am certainly not telling anyone reading this post something they don’t already know. The point to this post is this.

Grow or die!

Barnes & Noble got fat and lazy, giving away the low ground to Amazon and allowing the online giant first mover advantage which B&N have yet to recover from. Banes & Noble have been playing follower the leader ever since. This brings us to their weak-ass excuse for bad Q2 earnings.

What’s my point?

That fantastic quarter that Amazon had in the face of “sluggish consumer spending” came from an increase in media to 31% and to 58% in electronics and other general merchandise so people are buying other things besides books. Maybe you should check it out.

WalMart Playing Russian roulette?

From Forbes:

LONDON - Two decades after the end of the Cold War, Russians could soon be filling their freezers with food from Wal-Mart Stores.

Russia has proven to be the final frontier for Wal-Mart Stores’ (nyse: WMT - news - people ) European ambitions, and now the world’s largest retailer is reported to be circling the Russian retail chain Lenta, along with a handful of other Western companies.

The Bentonville, Arkansas-based company is competing with French supermarket company Carrefour, (other-otc: CRERF - news - people ), Kesko and Agrokor Group, to buy Lenta in a deal that could be worth $2.0 billion, according to the Russian daily Vedomosti.

Lenta has 31 hypermarkets in Russia, with 14 in St. Petersburg, and the remainder in several other large Russian cities. The company’s sales after tax came in at $1.5 billion, in 2007.

Foreign investors may be wary of entering Russia, where the government has reportedly threatened retailers with tax inspections and penalties if they do not comply with occasional food price freezes.

But Gordeyeva does not think that this issue, or the new laws being drafted that could affect the regulation of market share in the retail sector and the pricing of goods, will affect foreign investment in Russia’s retail sector.

Someone from Bentonville please email me or leave a message or send a carrier pigeon if you have to to let me know if you guys have access to television and/or newspapers down there. Why? Because someone in business development isn’t keeping up on current events.

NEWS FLASH

Russia is turning into the wild west, they are seizing private industries, they are taking control of the media, and holding energy starved Europe hostage. I guess these are the attributes you look for in a partner when you are the largest retailer.

India Calling

Why move into Russia now? Why not develop India? You have 1.3 billion English speaking people who are starving for your low-cost model. You have a ton of hurdles to get over in this country but you could own this space if you played your cards right. Just look at the upside, you have built in low cost labor, a thriving economy built around the tech sector, and a hungry consumer. Seems like a no brainer to me. With costs rising in China you should be digging shovels into the ground faster than I can type this post!

In closing, forget Russia, not for ever, but for now. You WILL get your asses handed to you, so if you push on with this move be prepared to defend yourself against things you don’t talk about in Bentonville.

China Manufacturing - Too Expensive?

Alright boys and girls, hold onto your knickers, this is going to be fun. I just finished an article by KEITH BRADSHER who says manufacturing in China is getting too expensive. Don’t get me wrong, it’s a great article, but WTF are we talking about here? Seems as if China is losing manufacturing jobs to other, poorer countries because of China’s rising wages.

Now, I don’t want to go off on a rant here, but how in the hell has China already gotten too expensive to manufacture goods? I mean everything from plastic cup manufacturing to building jet engines has gotten done in China, a country with an average income of $160 dollars. Forget the whole Wal-Mart bad, unions good thing, that’s old and played out. The question I want answered is this.

When do we run out of poor, uneducated people to exploit?

I mean really, there can’t be that many countries left that would be willing to subjugate their people and allow the messes that we have created in China. The pollution, the sub-standard living conditions, the total lack of respect for an entire population. I guess there are still countries in Southeast Asia to exploit, and after we rape those people we can all pile on the African continent…..as long as they haven’t all died from AIDS or genocide. Besides, India got too expensive years ago, I mean there they can actually afford cars an roads, can you believe that? Cars and roads, bastards!

But here is the difference between China and India. China allowed foreign companies to come in and have their way with their people. It was China’s way of keeping a strangle hold on their people while letting someone else do it for them. It was a masterstroke in a Fascist, Communist loving, Dr. Evil kind of way. In fact, it’s worked so well, China doesn’t know what to do with all the friggin’ cash they have, after already buying most of the United States mind you!

India, well they are a different story. Indians built up India. Companies like Tata, Wipro,  and Infosys Technologies have taken their country by the hand and helped it out of the shadow of the East India Company. I just wish they would stop thinking it’s cool to kill their daughters, but again, that’s a different blog.

They say the countries that make up BRIC (Brazil, Russia, India, & China) will be the major economies in this century, that they will be the driving force behind a new world order of redistributing the wealth, taking the poor and forgotten into the middle class by building schools, providing medical care, and creating a better way of life. Well to that I say Amen. Because contrary to what many people say, trade stops wars.