Supermarket giant Walmart has had great success in Mexico since its arrival in 1991.
“Walmart has stood out as one of the most successful self-service chains in the country, with sustained growth in store expansion and good results in revenue” (The Yucatan Times)
With that being said, certain sectors of Walmart business have not experienced the same success.
First off, independent Walmart pharmacies have failed to gain success in the Mexican market. Diverse financial analysts explained that a main reason for the failure of these pharmacies was due to market fragmentation.
“However, seven years after launching the pilot of the Medimart Pharmacies, in its sales report last year no longer appears any of the 10 units that came to exist.”
2. Banco Walmart
In addition, Banco Walmart, founded in 2007 with the objective of attracting customers who would like to save, has failed in Mexico.
According to data from the National Banking and Securities Commission (CNBV), in 2015, the 130 branches they had were sold to INBURSA after incurring losses of more than 2,800 million pesos over the 7 year period.
“According to an investigation by Signum Research, the profitability levels of Walmart Bank in 2014 were negative and destroyed the value for shareholders of the firm.”
3. Vudu streaming platform
Walmart presented the Vudu
platform in Mexico in 2012: a streaming service with prices ranging from $20 to $200 pesos.
“Its differentiator to Netflix was to provide higher resolution, a catalog with 3,800 titles and 270,000 users. By 2015 most users were gone so the service was withdrawn. Walmart recently reported that Vudu would focus on extending its services, but only in the United States.”
4. Mobile Virtual Operator (MVNO)
When Enrique Ostalé took over the management of WALMEX in 2015, he opened the possibility for Walmart to enter the Mobile Virtual Operator
(MVNO) business; but the business never actually started officially.
“The challenge of entering this business is to connect the sale of groceries with the mobile phone service, which requires planning that is often undermined by ambitious goals”.