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SmallRui Fu Xiang vs. Wal-Mart
It is said that Sam Walton's inspiration for Wal-Mart came from Rui Fu Xiang, a traditional Chinese vendor. Wal-Mart has now become the largest retailer in the world, while Rui Fu Xiang is still struggling for its existence.
Sam Walton, the founder of Wal-Mart, once said: "I got the inspiration for Wal-Mart from an age-old Chinese vendor, whose name was rooted in a legendary insect. According to the legend, this insect could bring people wealth and fortune. I think that Chinese vendor might have owned the earliest chain stores in the world. They did very well, very well indeed!"
Ruifuxiang
This could very well be a story devised by Wal-Mart's marketing department, serving as a kind of propaganda for their entry to China's market. Yet the Chinese vendor mentioned does exist. The insect that could bring wealth and fortune must be "Qingfu," which is recorded in the ancient books as a nickname for money. And the
Chinese vendor named after "Qingfu" must be the age-old Rui Fu Xiang Silk Shop.
Comparison of Status Quo
The original Rui Fu Xiang sits on an aged street. Its old-fashioned doorway reveals the shabbiness of the shop, contrasting sharply to the hustle and bustle of the "Big World" next door. It is quite gloomy inside the shop, with rolls of outdated cloth scattered on the counters. Few customers drop in.
Meng Hongsheng could not have expected such a scene when he established Rui Fu Xiang. On the contrary, Wal-Mart, founded one hundred years after Rui Fu Xiang, has developed into the world's largest retailer, with 1.2 million staff and more than 5,700 stores, including some 1,350 discount stores and nearly 2,000-combination discount and grocery stores.
The computer controlling its logistics is the world's most powerful after the Pentagon's.
In 2001, the Sunday Times Rich List put Robson Walton, the chairman, at the top of the list, with a fortune worth $US65.2 billion (￡45.3 billion). Now Wal-Mart has extended toJinan, the hometown of Rui Fu Xiang, with a Wal-Mart Supercenter with a budget of US$40 million.
Similar Management Beliefs
Actually we could find some similarities if we compare the management beliefs of Rui Fu Xiang and Wal-Mart.
Customer-friendly service
As a merchant deeply influenced by Confucianism, Meng Hongsheng set the motto of "Honesty as the foundation." Silk and cloth was processed atSuzhou, and were all branded with "Rui Fu Xiang" as a guarantee for quality. Rui Fui Xiang also prepared facilities to please and serve customers. For instance, all customers were treated to high-quality tea. Similarly, Wal-Mart employees works with the philosophy to respect every individual as every individual deserves to be treated with due respect and dignity, and to satisfy the demands of the customers by adopting a low price strategy so that people of all economic classes can walk into Wal-Mart and shop for what they need.
Inter-industry and inter-regional sales
In the 1930s, Rui Fu Xiang extended its business to silk, embroidery, tea, jewelry, pawnshops, and banks. It possessed more than 30 stores inBeijing,Tianjin,Shenyang,Shanghai, and other major towns in China. Wal-Mart developed in a similar way. Starting from a small town in the United States, Wal-Mart stores now cover a large territory in the world. Founded only a decade ago, the international division already accounts for 17 and 11 percent of the corporation's total sales and profits respectively.
Low price strategy
In the past, a kind of coarse cloth was produced in Shandong, which was popular among rural people for its durability and cheap price. It was through selling this kind of coarse cloth that Meng Hongsheng and his son accumulated their wealth. In this aspect, Wal-Mart has a similar motto in " Always low price, always": They always offer a low price on a full selection of products day in and day out. With this low price strategy, both Rui Fu Xiang and Wal-Mart succeeded in generating large revenues at small margins.
Could Rui Fu Xiang catch up with time?
The splendid past of Rui Fu Xiang has gradually faded over time. As a state-owned enterprise, it has sunk into stagnancy in the booming of a market economy. There seemed to be many reasons for its failure, such as state-owned are no longer protected by government, or people do not buy cloths to make clothes as they used to. Yet these are mere excuses. Rui Fu Xiang has to find its own position in the market to continue its existence.
Rui Fu Xiang represents a cultural tradition for Beijing and China. People still have much to do to protect this precious heritage.
