BEIJING: Wal-Mart, the world’s biggest retailer said on 27 February that it had bought 35% of a 101store hypermarket chain in China, in a dramatic move to better reach the nation’s increasingly affluent customers.
Wal-Mart, which did not disclose how much it paid for the stake in the Taiwan owned Trust-Mart chain, said that, subject to “certain conditions,” it would acquire ownership control in the future.
“We’re talking about 2010, around that timeframe,” Wal-Mart spokesman Jonathan Dong said while disclosing its plans to take control of the chain.
Wal-Mart vice chairman Michael Duke said that the investment was “an important step in bringing additional scale to our China retail business.”
French retailer Carrefour said late last year it decided not to bid for Trust-Mart after determining that organic growth would be a more suitable strategy in China.
Wal-Mart currently operates 75 stores in China, employing 37,000 people, while Carrefour has 90 hypermarkets.
Trust-Mart, which has a staff of more than 31,000 in China, will continue to operate under the Trust-Mart banner, and both companies plan to continue expanding each of the store chains on the mainland.
“The two companies will operate as two stand-alone companies. Both Wal-Mart and Trust-Mart are very good names in the retail market,” said Dong.
“They’ll have lots of name recognition. Both brand names have great value for the customers. We want to keep that.”
Trust-Mart chairman John Yu said the alliance would help the company benefit from Wal-Mart’s experience in logistics and operations.