Walmart China has big plans in small cities

Updated: 2011-08-25 11:10

By Li Woke (China Daily)

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Retail giant maintained double-digit growth and quadrupled outlets over past four years

Walmart China has big plans in small cities

Ed Chan, Walmart China's president and chief executive officer  

BEIJING - When Ed Chan took over as Walmart China's president and chief executive officer in 2007, his mission was to keep the business growing in the emerging market, because the chain retailer had sold its outlets in South Korea and Germany the year before.

In 2007, Walmart Inc, the world's largest chain retailer by sales and revenue, had more than 70 stores and 30,000 employees in China. "Since 2007, Walmart China has been maintaining double-digit growth, and now, four years later, we have more than 300 stores and 95,000 employees in the country," Chan told China Daily.

Walmart entered China in 1996. "We have been growing with the Chinese retail industry over the past 15 years and we are very satisfied with our performance," Chan said.

China is an important market in Walmart's global strategy, he said. According to Bloomberg News, retail sales revenue in China is expected to grow annually by 14.5 percent to $5 trillion in 2016. With a population of 1.3 billion, the country is experiencing fast urbanization, and the Chinese government is promoting domestic consumption to obtain sustainable development of the economy.

Walmart said it will keep its focus on smaller cities in China. "So far, 80 percent of our Chinese stores are in second-, third- or even fourth-tier cities," Chan said. "I believe the lower-tier cities will see faster economic development than first-tier ones. So, Walmart China will increase its investment in lower-tier cities."

The retailer plans to set up supermarkets and Sam's Clubs, a warehouse shopping service open to members, in lower-tier cities.

Business in China currently contributes "less than 10 percent" to the company's performance outside its home market, the United States, according to Chan. But he said he is looking forward to the growing demand. Chan believes China is the world's fastest-growing major retail market and "may one day be the biggest".

In mid-August, Walmart Inc released its second-quarter report. Net sales reached $108.6 billion, a 5.5 percent increase from $103.0 billion in the same period of last year. The net sales of Walmart International, the businesses outside the US market, increased by 16.2 percent to $30.1 billion, thanks in part to its mergers and acquisitions (M&As).

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