May 11, 2004

Bailian: WM Meets its Match?

For quite some time now, Americans have been focusing on the transfer of manfacturing jobs to China. While this doesn't really represent what is happening--manufacturing is become so productive that jobs are vanishing, leading to a higher percentage of manufacturing jobs being done in China--it does represent a real shift in economic activity.

And that shift is a dramatic increase in the size and purchasing power of the Chinese middle class. So much so, that they have their own "big-box" stores, 7 of which recently combined into the Bailian Group. And Forbes reports that the Bailan Group is ready to take on its foreign competitors:

Born of a seven-way merger last year, Bailian said in March it aimed to expand sales by 20 percent this year to more than $13 billion, and squeeze into the Fortune 500 circle of the world's largest companies by 2010.

For now, foreign firms maintain a tiny footprint. Sales generated by overseas companies accounted for less than 3.5 percent of retail sales in China, state media have said.

But they are making their presence felt.

Wang said Carrefour, Wal-Mart, Germany's Metro AG and three other unspecified foreign enterprises posted sales of 49.5 billion yuan last year -- equivalent to about 18.3 percent of revenues for the industry's top 30 players.

They ran 1,748 stores, or 16.9 percent of total outlets. ($1= 8.277 yuan)

Posted by Kevin on May, 11 2004 at 08:06 AM