Walmart Plans To Open 110 Stores In China By 2016
By Sam Lewis
Mega-retailer will also close 30 stores as it begins an overhaul overseas
Walmart plans to keep its reputation as the world’s largest retailer alive and well. Today in Beijing, the company announced it will expand its presence in China by opening 110 new stores there within the next three years. Walmart is also planning to shutter 30 of its underperforming China locations over the next year and a half, according to Greg Foran, president and CEO of Walmart China.
After cutting its annual profit forecast back in August, Walmart decided that the international market would be an area of focus. “China presents one of the biggest opportunities for us around the world to grow our stores and clubs,” says Doug McMillon, president of international business at Walmart. The company faces stiff competition from regional rivals Sun Retail, along with Chinese Resources Enterprise. Emerging markets have been a setback for Walmart, including the partnership it formed in India with billionaire Sunil Mittal ending early in October.
The plan is for the retailer to boost up its expansion efforts in smaller cities outside of Beijing and Shanghai. The company is also looking into its overseas distribution efforts and will add a new facility in the city of Shenyang in November. “We have supercenters, and we have Sam’s Club. We’ll be investing in both formats, as well as in distribution areas to help us improve in areas such as fresh food,” says McMillon. Remodeling is also in the works for 45 stores in China by the end of the year, with many more planned to be renovated in the next two years. These expansions will create an estimated 19,000 new jobs in China.
Additionally, Walmart announced additions to its China management team. Current SVP of real estate design, construction, and store planning Rob Bray will assume the same role for Walmart China. Adrian Blake has been added to Walmart China as SVP of business development for the region. Prior to his position with Walmart, Blake was a consultant specializing in property and construction.
It seems the move by Walmart to expand further into China is an effort to drive sales in a tough economic climate. According to Bain and Co., composite annual growth in e-commerce is expected to grow more than 30 percent by 2015. The retail landscape of China proves to be an excellent place to capitalize on this, as China was responsible for $181.6 billion or 14 percent of global e-commerce sales in 2012.