With its US results still in trouble, Wal-Mart (WMT) is turning its attention back to one of its most promising markets–China. According to a report in the Telegraph, the world’s largest retailer is considering spending $1 billion to buy Beijing Hualian which owns big box stores in the country.
Wal-Mart has already bought a piece of China’s Trust-Mart, and has a number of its own stores in the country.
The US company is gambling that it can get further into a tremendous growth market without being man-handled by the Chinese government. It has already put branchs of the Chinese communist party into the chain and has challenged some of the company’s pay practices. The more Wal-Mart pushes into that market, the greater the risk.
Wal-Mart China had 83 of its own stores up at the end of the last quarter, up from 57 in the same quarter a year ago. In its 10-Q, the company singled out the UK, Brazil, Mexico, and China as its big growth markets.
So, it appears Wal-Mart wants to wade deeper into the world’s most populated country.
But, be careful what you wish for because you might get it.
Douglas A. McIntyre
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