Home Depot announced yesterday it purchased its first Chinese home improvement retailer, Tianjin-based Home Way, in a move to tap the growing retailing market in China.

Through the acquisition, the world's largest home improvement retailer will enter 12 stores in six cities. The company declined to comment on the price of the deal. Home Way operates mostly in second-tier cities in China.

China's Vice-Minister of Commerce Yi Xiaozhun (first from right) and US Commerce Secretary Carlos Gutierrez (second from right) at the Home Depot, Home Way deal signing ceremony in Beijing yesterday. [China Daily]

"This acquisition provides us with a great point of entry in one of the world's largest and fastest-growing home improvement markets," said Bob Nardelli, chairman of Home Depot.

China's home improvement market is valued at nearly US$50 billion and has been growing at an annual rate of 20 per cent.

The deal ratchets up the number of recent foreign acquisitions in China's promising consumer market. The world's largest retailer, Wal-Mart, earlier beat Carrefour to control Trust-Mart, the second-biggest supermarket chain in China.

Tesco, a British supermarket chain, said earlier this week it was increasing its share in Hymall, one of China's largest retailers.

This acquisition will also make Home Depot compete face-to-face with its major rival, London-based Kingfisher Plc in the Chinese market. Kingfisher has been operating in China under the do-it-yourself chain store B&Q since it entered the market in 1999.

"Home Depot will work hard to be the No 1 (in China)," said Anneta Verschuren, president of Home Depot Asia. "We want to be strong and a leader in every country that we enter."

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