Wal-Mart is coming under pressure in the US, where localities often attempt to derail its expansion. But in China, associates (Wal- Mart's term for employees) are ready to sing more cheers as the Arkansas-based retail giant prepares to open a host of new stores.
Globally the company expects to add more than 5.5m square metres of retail space in 2006, which is an increase of more than 8% on the estimated current fiscal year-end square footage. China is a major component of that strategy. This year, Wal-Mart plans to add 12 new locations in China to the 24 Chinese cities it already serves. It already has a presence in Shenzhen, Kunming, Fuzhou, Dalian, Xiamen, Shantou, Dongguan, Harbin, Changchun, Shenyang, Changsha, Beijing, Nanchang, Ji'nan, Qingdao, Tianjin, Nanjing, Nanning, Wuhan, Guiyang and Taiyuan.
"In the US, the growth opportunities are limited," explains Joe Hatfield, senior vice-president of Wal-Mart Stores and president and CEO of Wal-Mart Asia, while touring fDi through a Supercenter in Guangdong province. But in China, with its 1.3 billion people and 8% gross domestic product (GDP) growth, the business potential appears unlimited.
In 2005 alone, the mega retailer celebrated openings in Shanghai, Chongqing, Beijing and Taiyuan. It has been in China since 1996, when it opened its first Supercenter in Luohu district, Shenzhen. Now its operation includes 40 Supercenters, three Sam's Clubs and two Neighborhood Markets.
"We employ about 26,000 associates in China today," says Mr Hatfield. "We will grow to over 40,000 associates one year from now."
Targeted philosophy
Wal-Mart knows exactly what it is doing: it emphasises an "every day low prices" philosophy, and maintains a low-price structure through aggressive buying and smart distribution. It ...