Tuesday, March 21, 2006

Retail Giant Expands in China

Walmart and Carrefour, two giant retail chainstores, have both announced plans to expand their operations in the China market.

According to a report by BBC, combined sales of China's 30 leading retailers jumped by 31% in 2005 to 491 billion yuan. This reflects an optimistic increase in private consumption in the economy, as policymakers in China have proposed a more consumer-driven growth.

Carrefour, the world's second-biggest retailer, increased the number of its stores in China to 78 last year. Sales rose by 25% to 17.4 billion yuan ($2.2 billion) in 2005, making it China's ninth-biggest retailer by sales. The French retailer is certainly gaining a foothold in the China market, although the Commerce Ministry reported that the domestic Shanghai Brilliance was the biggest retailer, with sales of 72.1 billion yuan in 2005.

Meanwhile, Walmart, the world's largest retailer, did not make it to the Commerce Ministry's top thirty retailers list. Wal-Mart Stores has just announced its plans to hire 150,000 people over the next five years, five times the number it currently employs. Walmart has 58 stores in China now, slightly fewer than Carrefour.

The growth of foreign-owned retailers in the Chinese market is a result of important economic events in the past few years, such as China's accession to the WTO, which mandated the opening of the retail market to foreign competition; the lift of the currency peg last year; and the continuous growth in the Chinese economy, resulting in higher purchasing power for Chinese consumers.

BBC News Online, Carrefour Boosts China Presence

CNN Money.Com, Wal-Mart poised for major China expansion

No comments: