By Sarah Falson
SHANGHAI: Wal-Mart, the world’s largest retailer, has reportedly handed over $1 billion for Trust-Mart Company, a Taiwanese retail operation that owns 100 stores across China.
Though the Chinese economy is rapidly growing, opportunities for foreign retail-chains are largely untapped. According to various reports, Wal-Mart is experiencing difficulties with growth in its homeland, and though the deal is yet to be approved by Chinese authorities, Wal-Mart’s new acquisition along with its 66 already-established Chinese stores, could make it the biggest foreign retailer in the country.
“China is the only country in the world that offers Wal-Mart the chance to replicate what they have accomplished in the U.S.,” Bill Dreher, an analyst at Deutsche Bank Securities, told the NY Times yesterday.
China’s economy is the fastest-growing in the world, expanding at a rate of 10-11 per cent annually. Sales of retail stores are even more rapid, jumping by about 15 per cent a year for the last several years, reported the NY Times.
Trust-Mart’s 100 stores employ over 30,000 people in more than 20 Chinese provinces, but the chain is classed as one at “the low end of the supermarket chains,” according to the NY Times.
This means that Wal-Mart will need to re-invent its new Trust-Mart stores, if it hopes to streamline its position in the international marketplace.
Multiple web-based reports have cited that French-based retail chain, Groupe Carrefour, was also interested in acquiring Trust-Mart Company. Groupe Carrefour currently owns 79 stores in China.