Wal-Mart Discovers Asian America

By Grace Niwa, Jul 22, 2005
AsianWeek.com

Wal-Mart has conquered retailing. It stands as undisputed number one in the world. But, the battle came at the expense of its image with consumers. An odd alliance of competitors, labor unions and activists has been pummeling Wal-Mart in the press. And now complaints from Asia America are catching the attention of the world’s largest retailer.

Many see Wal-Mart threatening the Asian American economic base of small businesses. Numerous studies from University of Pennsylvania’s Wharton School of Business to Iowa State University’s Department of Economics have questioned Wal-Mart’s aggressive pricing policies. Some say it’s survival of the fittest. But Wal-Mart’s practices have caught the eye of Congress and the ire of local politicians like Jun Choi, mayoral candidate for Edison, New Jersey.

Choi’s campaign has included an anti-Wal-Mart platform. “Blue collar jobs will be lost and small businesses ... owned by Asians will be threatened,” Choi said. “It’s safe to say that Wal-Mart has a negative effect on Asian Business owners. I disagree with Wal-Mart’s corporate philosophy in not providing health care benefits and acceptable wages for a state, which has the highest median household income in the U.S. It would be very tough for families to survive.” Choi is now trying to reverse a decision to let Wal-Mart into his town.

No other racial group depends on small businesses more than Asian America. We have 913,000 small businesses in our community. Without those opportunities, Asian Americans would have a harder time adapting and helping their children advance to more prestigious careers. Many APAs see Wal-Mart as narrowing the road we must take toward achieving the American dream.

Groups like the Asian Pacific American Labor Alliance (APALA) and the Los Angeles-based Asian Pacific American Legal Center (APALC) have announced that they will not take donations from Wal-Mart. They cite Wal-Mart’s policy preventing working class Asian Americans from organizing. Low $8 an hour average wages and a union-free workplace are a part of the way Wal-Mart delivers on its “Always Low Prices” promise. Earlier this year, Wal-Mart said it will close a store in Canada and fire its workforce instead of accepting a collectively bargained contract.

But corporations like Wal-Mart cannot be successful without listening to customers with cash to spend. And Wal-Mart has recently started to court foreign-language speaking APAs. In April, the retailer started its first advertising campaign exclusively in Asian languages. The print and broadcast ads are running in Cantonese, Mandarin, Vietnamese and Taglish. The campaign was developed by IW Group of Los Angeles. And it will be seen in 9 cities including Los Angeles, Houston and San Jose.

“Wal-Mart believes in featuring real-life people in their advertisements,” Bill Imada, chairman and CEO of IW Group says. “Many consumers have told us that they like the fact the people are real people. Some of them have accents. Some are a bit shy. But the nice thing about the people in Wal-Mart’s ads is that it reflects people who truly appreciate what they find at Wal-Mart.”

The advertising campaign has received mixed reviews and is targeted only to Asian immigrants rather than addressing the Asian American community as a whole.

“We’re excited about our campaign,” Wal-Mart’s Senior Communications Manager Linda Blakely said. “Our goals were two fold. We wanted to acknowledge and thank our Asian American shoppers and also extend an invitation to Asian Americans who have not been to our stores.”

While it is hard to imagine Wal-Mart taking time away from mahjong, the retailer deserves credit for making an effort. Wal-Mart employs about 30,000 Asian Americans. And unlike many U.S. corporations, Wal-Mart has appointed an APA within upper management. Senior Vice President Michael Fung is the company’s chief audit executive. He has a seat on the board of the Asian and Pacific Islander American Scholarship Fund (APIASF), a group that Wal-Mart and other corporations helped to create. APIASF recently gave its first round of $330,000 in scholarships to 165 entering Asian American college freshmen. Wal-Mart also donates to APA groups such as the Japanese American Citizens League (JACL), the Organization of Chinese Americans (OCA), the Asian American Business Association and the National Asian Pacific American Bar Association (NAPABA).

“Wal-Mart doesn’t just give money,” said Michael Chu, NAPABA president. “They put their money where their mouth is. At our last convention, 19 Wal-Mart employees … attended to show support.” NAPABA has received money from Wal-Mart for four years.

Wal-Mart says most of its charity money is given on a local level. So, the best person to contact about donations is often a store manager.

Wal-Mart likes to think of itself as an anchor store that attracts customers to surrounding Asian American small businesses. “We find that small businesses flourish because we bring traffic to the area,” Blakely said. To help small business, Wal-Mart has created a “second tier supplier” program to make it easier for small businesses to sell goods in its stores.

Wal-Mart has done a lot to try to repair its image within Asian America. But, most of its efforts have occurred recently, and repairing a corporation’s image takes a long-term commitment.