The FINANCIAL — Wal-Mart Stores Inc. is increasing its investments and opening new stores in China as the fight for Chinese consumers intensifies in the country’s tough retail environment, according to Nasdaq.
The Bentonville, Ark., retailer plans to open 115 new stores across China by 2017, creating more than 30,000 jobs, the company said in a statement on April 28. Wal-Mart previously said it aimed to run 480 stores in China by 2016, up from around 400 now.
Wal-Mart will also invest 370 million yuan ($59.6 million) to remodel stores this year, the statement said. The company is also launching “in the near future” a mobile app to help connect its stores with its e-commerce arm, Yihaodian, the statement said, adding that it will enable customers to order merchandise online and pick it up in the store.
Wal-Mart’s move highlights a goal to increase scale in one of its key growth markets and its ambitions to gain ground against Chinese competitors that have a larger number of physical stores and formidable online rivals that dominate e- commerce.
The move comes as Wal-Mart faces a tough retail environment in China, where in-store sales growth is dwindling for most retailers for variety of reasons–from slower economic growth to a swift consumer shift to online shopping. Wal- Mart said in February that its fourth quarter net sales fell 0.7% in China, down from a year earlier, and sales at stores open a year, or same-store sales, dropped 2.3% in the period.
The retailer’s executives have said that the Chinese government’s push to stamp out waste in the government and at state-run companies has pinched sales, lowering sales of gift cards that state firms previously gave to their employees, cutting sales of alcohol and gift sets tied to China’s gift-giving culture.