Biggest retailer to expand in China

BEIJING – Wal-Mart, the world’s biggest retailer, said yesterday it had bought 35 per cent of a 101-store hypermarket chain in China, in a dramatic bid to better reach the nation’s increasingly affluent customers.

The US retail giant, which did not disclose how much it paid for the stake in Taiwan-owned Trust-Mart, said that it aimed for ownership control in about three years’ time, subject to “certain conditions.” “We’re talking about 2010, around that timeframe,” Wal-Mart spokesman Jonathan Dong told AFP.Wal-Mart vice chairman Michael Duke said in a statement that the investment was “an important step in bringing additional scale to our China retail business.”Based on the most recent sales figures available, the combined forces of Wal-Mart and Trust-Mart would seem to topple Carrefour of France from its current position as the dominant foreign retailer in China.”Wal-Mart could rise to number one,” said a Beijing-based analyst, who asked not to be named.”But Carrefour and domestic players are also very focused on the China business, so competition is still there.”Carrefour posted sales of 17,4 billion yuan (US$2,2 billion) in 2005, compared with 13,2 billion yuan for Trust-Mart and 9,9 billion yuan for Wal-Mart, data from the China Chain Store and Franchise Association showed.Analyst quoted rumours in the market that Wal-Mart, which currently operates 75 stores in China, agreed to pay one billion dollars for the acquisition.Carrefour, which has 90 hypermarkets in China, said late last year it decided not to bid for Trust-Mart after determining that organic growth would be a more suitable strategy in the Chinese market.Wal-Mart currently operates 75 stores in China, employing 37 000 people, while the 101 Trust-Mart stores have a staff of more than 31 000.Nampa-AFP”We’re talking about 2010, around that timeframe,” Wal-Mart spokesman Jonathan Dong told AFP.Wal-Mart vice chairman Michael Duke said in a statement that the investment was “an important step in bringing additional scale to our China retail business.”Based on the most recent sales figures available, the combined forces of Wal-Mart and Trust-Mart would seem to topple Carrefour of France from its current position as the dominant foreign retailer in China.”Wal-Mart could rise to number one,” said a Beijing-based analyst, who asked not to be named.”But Carrefour and domestic players are also very focused on the China business, so competition is still there.”Carrefour posted sales of 17,4 billion yuan (US$2,2 billion) in 2005, compared with 13,2 billion yuan for Trust-Mart and 9,9 billion yuan for Wal-Mart, data from the China Chain Store and Franchise Association showed.Analyst quoted rumours in the market that Wal-Mart, which currently operates 75 stores in China, agreed to pay one billion dollars for the acquisition.Carrefour, which has 90 hypermarkets in China, said late last year it decided not to bid for Trust-Mart after determining that organic growth would be a more suitable strategy in the Chinese market.Wal-Mart currently operates 75 stores in China, employing 37 000 people, while the 101 Trust-Mart stores have a staff of more than 31 000.Nampa-AFP