Wal-Mart to Build First China Mall in Zhuhai

Budget-minded retailer Wal-Mart China is hoping to stretch its yuan a bit further by building its own shopping mall in Zhuhai, according to a company announcement on Thursday.

The US retailer made famous for its discount stores, plans to spend RMB 600 million ($97.7 million) to open its first shopping mall in Zhuhai in 2016. The 100,000 square metre Zhuhai Mall in the southern Chinese city is planned as the first of three or four malls planned by Wal-Mart for the China market.

Joining IKEA in Developing Its Own Retail

Wal-Mart plans to anchor its mall with one of its Sam’s Club outlets, similar to the way in which Swedish homewares retailer IKEA is developing its own chain of self-anchored shopping centres. The moves by IKEA and Wal-Mart are seen by many analysts as a way to beat rising rents and the lack of quality retail space in many second and third tier cities in China.

By investing in its own projects, Wal-Mart will also have more control over the layout of its stores, as well as the overall shopping experience in the centres.

In 2013 IKEA announced plans to invest 1 billion euros ($1.3 billion) to develop its own chain of malls across China, and opened its first mall in Wuxi during June of this year. The company expects to open additional centres in Beijing and Wuhan, all anchored by IKEA stores.

Wal-Mart Continues China Expansion Plan

Wal-Mart China already has more than 400 retail outlets and more than 100,000 employees, after first setting up shop in Shenzhen in 1996. The company already has 10 Sam’s Club stores in eight Chinese cities.

Last month the retailer already announced plans to open 110 new storefronts in China, primary in second, third and fourth-tier cities.

In addition, the Wal-Mart has acquired 54 percent of Chinese online retailer Yihaodian, one of the country’s biggest ecommerce sites, and is reporting “double-digit” sales growth from the operation. Accordin to financial reports, Yihaodian said it brought in $1.9 billion in sales last year.