Wal Mart Considers Buying In The Chinese Market

Scott Price, CEO of Wal Mart Asia, disclosed that Wal Mart was considering acquisitions in the Chinese market to cope with the growing strength of its local competitors. Under the current situation that the traditional retail industry is under the pressure of e-commerce, rent and other pressures, Wal Mart seems to have made no secret of its intention to continue expanding in the Chinese market. Industry critics believe that in the coming tide of China's retail industry integration, Wal Mart will certainly hope to become the final winner, but in the face of e-commerce, "mom and pop stores" and other more flexible new formats, consumers may not necessarily choose Wal Mart as their final choice.

　　 Retail industry Integration tide intensifies competition among big alligators

It is understood that Wal Mart currently has 398 stores in 118 cities in China, and is seeking acquisitions in cities that are not in a leading position to expand market share. Price declined to disclose the specific cities where Wal Mart made acquisitions and the potential acquisition targets.

It is believed that Wal Mart has encountered fierce competition in China, and its local competitors are rapidly expanding and increasing market share. Wal Mart ranks second in market share in China, behind Gaoxin Retail Group. Gaoxin Retail is a company jointly assembled by Taiwan Runtai and Auchan Group, with 284 stores in China. Another competitor of Wal Mart, China Resources Venture, has 4100 chain stores in China, and recently acquired Tesco, a British retailer with 131 stores in China.

Price publicly pointed out that similar joint ventures were not suitable for Wal Mart's game rules, and Wal Mart would not pursue transactions that would increase the number of chain stores by hundreds at a time. He said, "We are looking for retailers who have been operating for more than ten years, and they are all in the same city. The cost of such investment is very low."

　　 Barclays Vineet Sharma, director of the Consumer Research Department, said that Wal Mart, Gaoxin Retail and China Resources would become the winners in the tide of China's retail industry integration. We believe that the industry would be rapidly integrated and large companies would become larger.

Shaun Rein, founder of China Market Research Group, commented that Wal Mart's low-cost business model did not attract Chinese consumers, who would find cost-effective goods through the Internet and mom and pop stores.

　　 Wal Mart expands against the wind

Although the future of the traditional retail industry is worrying, Wal Mart's pace of expansion has not stopped. On September 26, not long ago, Wal Mart opened four shopping malls in Fuzhou, Fujian, Zhuhai, Guangdong, Pu'er County, Yunnan and Aotou Town, Huizhou on the same day.

According to Wal Mart, last year Wal Mart announced that it would open 100 stores in China from 2013 to 2015, and this plan is gradually realized. The number of new stores is expected to reach about 30 this year. In the next three months, Wal Mart also plans to open new stores in Shanghai, Hebei, Henan, Hubei, Hunan, Sichuan, Jiangxi, Shanxi, Guangdong, Guangxi, Fujian, Yunnan, Liaoning and many other provinces and cities.

The industry believes that, Wal-Mart The current expansion rate is actually slowing down, because Wal Mart has previously announced that it aims to open 50 to 60 new stores in China every year.

Greg Foran, president and CEO of Wal Mart China, is optimistic about the development prospect: "Although the retail industry still faces heavy pressure and fierce industry competition in 2013, Wal Mart's confidence in the Chinese market has never wavered. Our main development direction in the future is to consolidate the foundation of business development and re layout the Chinese market. Although some stores may be closed during this period, our focus is to increase investment and develop and upgrade existing stores."

Gao Fulan also said: "In recent years, the acceleration of China's urbanization process, the development of the middle class and the increase of disposable income of residents have all brought unprecedented development opportunities for Wal Mart to enter a broader local market. In addition to expanding its development in first and second tier cities, Wal Mart will also focus on and enter more third and fourth tier cities, even small towns, to provide high water for local consumers in the future Accurate services and "one-stop" shopping options at affordable prices. "

In keeping with the steady growth of the number of stores, Gao Fulan also revealed Wal Mart's more specific strategic development plan in China, including building an advanced logistics distribution network, increasing investment in food safety, upgrading stores, and expanding Sam's Club.