Joe Hatfield is the quintessential Wal-Mart guy--a chain-smoking good ole boy from Baltimore who started as an assistant store manager and toy buyer in the American heartland nearly 30 years ago under the tutelage of Sam Walton. Today he is the missionary from Bentonville, Ark., bringing the Wal-Mart way to China. "I was blessed to work for Sam Walton," he says, "and I am doubly blessed to work in China." Walking through a brightly lighted store in Shenzhen, the boom town across the border from Hong Kong, Hatfield, who heads Wal-Mart's retail operations in China, can't disguise his delight over the--what else?--"everyday low prices!" He zips over to an electronic keyboard selling for $20. "It was three times more a few years ago!" he exclaims. He pauses at a bathroom scale that used to sell for $6 and now is just $2.50. "We found a new vendor," he says. "It's amazing. We're bringing people a great shopping experience!" Chinese customers, piling goods into their shopping carts, seem to agree. In a corner of the food department, Wal-Mart salespeople lead a group of giggling women shoppers in a rousing relay race, transporting small sausages down the aisle with chopsticks.
From Wal-Mart's modest offices across town--a sea of small cubicles plastered with Sam Walton's inspirational messages (DON'T ALLOW YOURSELF TO FALL INTO DIFFICULT SITUATIONS YOU CAN'T CHANGE!) in Chinese--Hatfield is staging his own little revolution. He runs 46 stores today but has much bigger plans. In two years, Wal-Mart will double that number and, in the next year alone, he will train some 25,000 new employees in the art of delivering those everyday low prices to China's growing middle class. It's a grueling, nonstop job. Hatfield has visited 70 Chinese cities in the past six months, convincing Communist Party secretaries and provincial governors alike that opening more Wal-Marts is a "win-win-win-win-type situation." The core of his message to Wal-Mart's associates (as all company employees are called) is simple: respect for the individual--customers in particular--"is what we're all about." Unlike in most Chinese companies, the system is transparent--guanxi, or personal connections, don't matter in the firm's Chinese stores. "The culture of Wal-Mart is stronger in China than anywhere else in the world," he says.
That shouldn't be surprising. The giant retailer is the biggest player in the huge and growing U.S.-China business relationship. Hatfield's stores are simply a sign that the alluring but elusive China market is opening up to all comers. But as grueling as Hatfield's job is--when asked what he does for fun in Shenzhen, he responds, "Nothing''--he has the less controversial half of his firm's business.
It's the buy side, not the sell side that gets the headlines back home. Wal-Mart sources everything from T shirts to toys to lighting fixtures in China--which puts the company right in the firing line of those who think the U.S. manufacturing sector is being killed by too-cheap-to-beat Chinese imports. By itself, Wal-Mart is China's sixth largest export market-- just behind Germany--buying some $18 billion worth of goods last year.