Wal-Mart to open up to 110 new China stores by 2016

Wal-Mart to open up to 110 new China stores by 2016

12:43am EDT

By Matthew Miller

BEIJING (Reuters) – Wal-Mart Stores Inc (WMT.N: Quote,ProfileResearchStock Buzz), the world’s biggest retailer, is expanding its China business as it seeks to raise profitability in a slowing retail sector. Wal-Mart will open up to 110 facilities in China between 2014 and 2016, in addition to the 30 it has already opened this year, it said at a press event in Beijing on Thursday.Wal-Mart has closed 11 stores and is looking to close 15-30 others over the next 18 months, said Greg Foran, chief executive of Wal-Mart China, in what he called part of a rationalization process.

The U.S. company is tackling tough global economic conditions and a fundamental change in China’s retail sector, as annual sales growth slows and consumers move towards shopping online.

Wal-Mart wants to profit from China’s changing retail landscape by embracing e-commerce, which is expected to record 32 percent composite annual growth between 2012 and 2015, according to Bain & Co.

“Customers are using technology more, and especially here in China,” said Wal-Mart Chief Executive Officer Mike Duke.

“We love customers to understand price, and the safety of the product they’re purchasing. E-commerce is a great enabler allowing Walmart to grow globally.”

Duke said Wal-Mart’s e-commerce business grew about 30 percent in the first half of the year, and that the company is aligned with China’s government strategy that promotes an emerging middle class and urbanization.

Wal-Mart announced last week that it was closing 50 unprofitable stores in Brazil and China as the retailer seeks to ensure sales growth outpaces operating expenses. International sales declined 2.9 percent in the three months ended July 31.

The Bentonville, Arkansas-based retailer competes in China against market leaders Sun Art Retail Group Ltd (6808.HK: QuoteProfileResearchStock Buzz), a joint venture between Taiwan conglomerate Ruentex Group and privately held French retailer Groupe Auchan SA, and China Resources Enterprise Ltd (0291.HK:QuoteProfileResearchStock Buzz), which in August teamed up with British retailer Tesco Plc (TSCO.L:QuoteProfileResearchStock Buzz).

Last year, Wal-Mart bought control of its Chinese online store Yihaodian, which claims 24 million registered users and provides same-day delivery services to customers.

Wal-Mart operates more than 400 retail hypermarkets, Sam’s Club stores and distribution centers in more than 160 cities throughout China.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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