WAL-MART CONFIRMS EXPANSION PLAN FOR CHINA

LISA A. TIBBITTS

BENTONVILLE, Ark. -- Wal-Mart Stores here is forging ahead with its plan to open stores on mainland China later this year, according to Bobby Martin, president and chief executive officer of Wal-Mart's international division.

Martin, speaking at a seminar in New York, said China's middle class is expected to grow 11.4% by the end of the century, and Wal-Mart hopes to grow with those dynamics in mind.

He confirmed reports that the company expects to open two "full-sized" warehouse clubs in the Chinese cities of Shenzhen and Shanghai.

"We did elect, this past year, to move outside this hemisphere and begin to learn and travel the learning curve in Asia," he said. "We have made our investments in Hong Kong where we currently have three wholesale clubs open and we will open later this year in mainland China," he said.

Wal-Mart premiered the Value Club format with its entry into Hong Kong last year. The stores have approximately 20,000 square feet and 1,000 stockkeeping units. They are considered smaller versions of Sam's Club membership warehouse stores, which run about 100,000 square feet in the United States and Mexico. In its Hong Kong venture, Wal-Mart partnered with Ek Chor Distribution System, a Hong Kong subsidiary of Charoen Pokphand Group, Bangkok, Thailand, which is an agro-industrial company in Asia and a major foreign investor in China. It was unclear whether its presence on mainland China would be a solo affair or part of a joint venture. However, Martin said, "We do joint ventures where possible to compensate for higher risks."

Martin's comments were made at the annual convention of the National Retail Federation in New York.