Most (70%) of Wal-Mart's Products Are Produced in
OF STOCK PRODUCED IN
CHINA TO REACH $18
CHINA BUSINESS WEEKLY
The world's largest retailer, Wal-Mart Stores Inc, says its
inventory of stock produced in China is expected to hit US$18 billion
this year, keeping the annual growth rate of
over 20% consistent over two years.
The trend is expected to continue,
company officials revealed.
"We expect our procurement stock from
China to continue to grow at a similar
rate in line with Wal-Mart's growth worldwide, if not faster," said
Scott, the president and CEO (chief executive officer) of Wal-Mart.
An unnamed company official also stated
the firm will extend its procurement
base from South China's Pearl River Delta to the North
and East China in the
coming few years.
A market rumour says the retailer has
its eyes on a 340,000-square metre
warehouse at a logistics garden of the Shanghai Waigaoqiao Bonded
Scott covertly visited the site earlier
this month, and hopes to own the
whole warehouse to accommodate the firm's further expansion in
At present, Wal-Mart has quite limited
warehouse resources in East China.
Xu Jun, Wal-Mart China's
director of external affairs, ruled out the rumour,
saying the CEO has never visited that or any other site for a
Nevertheless, he said
China is Wal-Mart's most important supplier in the
world. The overseas procurement home office in Shenzhen, a city of
China's Guangdong Province, has played a key role in the firm's global
Wal-Mart shifted its overseas
procurement centre from Hong Kong to Shenzhen
in February 2002 to better serve the purchasing and exporting
"If Wal-Mart were an individual economy,
it would rank as China's
eighth-biggest trading partner, ahead of Russia, Australia and
By the end of September, 2004, the top
seven trading partners to the Chinese
mainland are the European Union, the United States,
Japan, Hong Kong, ASEAN
(Association of Southeast Asian Nations), South Korea and China's
Province, state statistics from the Ministry of Commerce.
Last year, the firm bought US$15 billion
products from China, half from
direct purchasing, the other from the firm's suppliers in China.
More than 5,000 Chinese enterprises have
established steady supply alliances
Good quality and low price are the major
attractions of the retailing giant.
Insiders point out
Wal-Mart's imports from
China have largely influenced the
U.S. trade deficit in China, which is expected to reach US$150 billion
Xu declined to comment if the
anti-dumpling measures of the US Department of
Commerce have impacted the firm's procurement of textile commodities
household appliances in
China, saying again that China is an important
sourcing base for the firm.
So far, more than 70%
of the commodities sold in Wal-Mart are made in
Experts say Wal-Mart's plan of
increasing its procurement from China has
granted the firm a positive corporate
reputation in the country.
"Buying more products in
China means more job opportunities, which helps the
firm win not only the government's hearts, but also the customers'
appreciations," said Wang Yao, director of information department
China General Chamber of Commerce.
In the United States, poor
people find it possible to afford cheap "Made In
China" products for their daily necessities, Wang said.
Wal-Mart, headquartered in
Bentonville, Arkansas, entered China in 1996. It
has opened 39 stores, including supercenters, "Sam's Clubs" and
markets in 15 cities around China, including Beijing, Harbin and
It has recently announced the opening of
its first store in Shanghai, slated
for the middle of next year.
The firm has a total of 4,900 stores in
10 countries worldwide. [ November
29, 2004 ]