Business

Sam's Club eyes fatter wallets of burgeoning middle-class shoppers

By Bao Chang (China Daily)
Updated: 2010-11-18 07:49

Shoppers and employees at a branch of Sam's Club, which is owned by Wal-Mart Stores Inc, in Beijing. The warehouse club plans to expand its presence into smaller cities. [Raul Vasquez / Bloomberg]

NANJING - Wal-Mart Stores Inc plans to launch online sales of its membership warehouse retail chain, Sam's Club, in China.

The move comes as the company attempts to increase the chain's outreach and tap demand from China's emerging middle class.

"We aim to provide online sales service to the customers of our membership-only stores, as Sam's Club enters more cities in China this year," Wang Pei, vice-president of Wal-Mart's Chinese division, told China Daily.

"The online sales of both Sam's Club and Wal-Mart supermarkets may launch at the same time," Wang said without providing a specific time frame.

The retail giant's optimism is borne out by statistics in June showing that China has more than 420 million Internet users, exceeding the combined populations of the United States and Germany, according to data from the China Internet Network Information Center.

The US-based retailer, which first introduced Sam's Club in the city of Shenzhen in 1996, now operates Sam's Club stores in Beijing, Fuzhou, Guangzhou and Shenzhen, and has 191 supermarkets in 103 cities nationwide.

Like other warehouse clubs, most merchandise at Sam's Club is sold in bulk and directly off pallets. Clubs are arranged much like a warehouse, with merchandise stocked in warehouse-style steel bins.

Sam's Clubs have suffered sluggish sales in China over several years.

However, Wang of Wal-Mart said she is expecting a good return from Sam's Clubs' expansion, as she sees a big potential in the nation's ongoing urbanization and emerging middle class who have an affinity with membership purchasing and e-commerce.

Early this year, Wal-Mart announced it would increase the presence of Sam's Clubs in the country.

The biggest Sam's Club in China was opened in Beijing on Nov 14, and the sixth and seventh stores will be opened in Beijing and Shanghai by the end of the year.

"It's time for us to accelerate the store opening of Sam's Club, because the middle-class in China is growing very fast and our target is to provide premium products to these upscale consumers," Wang said.

Aside from development in the big cities, Wal-Mart also plans to further expand in smaller and medium-sized cities in China.

According to the National Bureau of Statistics, China's total retail sales increased 18.2 percent year-on-year to 9.7 trillion yuan ($1.44 trillion) in the first eight months of this year.

China has become the world's second-biggest economy with GDP of $1.42 trillion for the third quarter this year.

Wal-Mart said the company will develop continuously, with an industry portfolio including Sam's Club, supermarkets, and shopping malls in China, to seize business opportunities provided by the country's rapid growth.

China Daily