Wal-Mart to open five in Beijing - Brief Article

DSN Retailing Today, Nov 19, 2001 by Mike Troy

BENTONVILLE, ARK. -- Wal-Mart's focus on government relations in China has paid off as the retailer recently secured approval to enter the Beijing market with five stores.

Recent press reports from the Far East indicated that Beijing authorities granted Wal-Mart approval to open the five stores, thereby allowing Wal-Mart to negotiate property agreements and line up Chinese partners before seeking business licenses. A Wal-Mart spokeman was unable to confirm details of the media report at press time. However, International Division ceo John Menzer has spoke openly in the past about Wal-Mart's potential to replicate its domestic success in China. Earlier this year, he told DSN Retailing Today, "We now feel comfortable about growing much faster in China."

Wal-Mart entered China in August 1996 and ended its last fiscal year with 11 units. This number had increased to 15 units at the end of October. Although the pace of future expansion is unclear, China's pending admittance to the World Trade Organization later this year is expected to benefit foreign retailers.

"Longer term, it is expected that as a result of China's admittance into the WTO there will be fewer business ownership restrictions for foreigners, reduced import taxes, upgraded distribution infrastructure and more foreign direct investment," according to UBS Warburg analyst Linda Kristiansen.

The announcement out of China followed months of speculation about what is believed to be Wal-Mart's imminent entry into Japan. Bankrupt Japanese supermarket chain Mycal is evaluating a short list of takeover candidates believed to include Wal-Mart.

Both of these developments have overshadowed events of a more symbolic nature in Germany, where Wal-Mart is opening its first ground-up stores since entering the country via acquisition nearly five years ago. A supercenter in the town of Pattensen, just south of Hannover, was scheduled to open on Nov. 13, and another supercenter near Leipzig was scheduled to open on Nov. 20.

"We have incorporated the best practices of our 10 years of international experience in these two new stores and applied it to the German market. They feature our very latest merchandising and marketing concepts," said Kay Hafner, president and managing director of Wal-Mart's German operations.

RELATED ARTICLE: WAL-MART IN CHINA

Wal-Mart recently received approval to open five units in Beijing. Currently, the retailer operates 15 locations in China.

SHENZHEN

5 supercenters

1 Sam's Club

DAILAN

2 supercenters

DONGGUAN

1 supercenter

SHANTOU

1 supercenter

FUZHOU

1 supercenter

1 Sam's Club

SHENYANG

1 supercenter

KUNMING

1 supercenter

1 Sam's Club