Wal-Mart Stores Inc (NYSE:WMT) Eyes More ‘Hypermarkets’ in China

Wal-Mart Stores Inc (NYSE:WMT) is planning to open more hypermarkets in China in order to meet the growing needs of younger people in the world’s most populous economy. Wal-Mart, known as the largest retailer in the world, said earlier this week that it plans to open 30-40 hypermarkets every year in the country, China Daily reported.

Wal-Mart plans to introduce a new hypermarket model in China. The retailing giant is aiming for more compact hypermarkets in major cities and smaller cities in China. The new hypermarkets, likely to be about 40% smaller than the normal ones, will get more restaurants, service-oriented shops, and more automatic facilities such as self-service weighing machines and self-service checkout desks, according to the report in China Daily.

Currently, Wal-Mart has more than 400 hypermarkets in China, including three in Shanghai, Kunming (Yunnan province) and Wuhan (Hubei province).

“As one of the fastest-growing markets globally, China has significant room for growth, and we plan to do more innovations in the forms of operation,” China Daily quoted Wal-Mart China President Wern-Yuen Tan as saying.

In addition to improving its online presence, Wal-Mart is also exploring different options to compete with e-commerce giant including Amazon and Alibaba.

Photo Credit: Wal-Mart

What is Hypermarkets?

A hypermarket is a superstore that combines a supermarket and a department store. It is a giant retail facility that offers a wide range of products under one roof, including full groceries lines and general merchandise.

Typically, hypermarkets have business models focusing on high-volume, low-margin sales and cover an area of 5,000 to 15,000 square meters. The term hypermarket was first introduced in 1968 by French trade expert Jacques Pictet. Americans don’t normally use the term hypermarket. Instead, they call such markets big-box stores, supercenters, or superstores.

Wal-Mart Stores Inc (NYSE:WMT) opened its first hypermart in the United States in 1987.

Wal-Mart in China

Wal-Mart Stores Inc (NYSE:WMT) started its operations in China in 1996. The retailer opened a supercenter and Sam’s Club in Shenzhen.

The retailer has a total of 433 retail units in China. It operates 398 supercenters on the Chinese mainland.

Earlier this year, Wal-Mart announced that it will open 30 to 40 new stores in China in 2017 and will spend more than RMB 300 million to upgrade about 50 stores.

Meanwhile, Wal-Mart-owned Sam’s Club plans to open 3 to 5 new clubs in 2017, including in Beijing, Shenzhen, Nanchang, Nanjing, and Changsha.

Photo Credit: Wal-Mart

In June last year, Wal-Mart announced a strategic alliance with China’s largest e-commerce firm JD.com to compete with online platforms in China by combing e-commerce and retail.

Last year, Wal-Mart Stores Inc (NYSE:WMT) opened 24 new stores in China, including 21 hypermarkets and 3 Sam’s Clubs, and upgraded about 60 stores.

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