Wal-Mart targets low-income and rural consumers in China

Wal-Mart, the world’s largest retailer, has launched a no-frills store format in China targeting low-income and rural consumers, a report said yesterday.

The US chain has opened a “compact hypermarket” in the eastern province of Jiangxi that is expected to be the first of a series of stores using a bare-bones model developed in Latin America, the Financial Times said.

Compared with the retailer’s larger outlets, the new stores will be smaller and have basic decoration such as cement floors and brick walls, the report said, citing the chief executive of Wal-Mart’s international business.

“It is going to help us reach more people not only in urban markets but also reaching people in rural areas,” Doug McMillon was quoted as saying. The new compact hypermarket in Zhangshu city is just over 3,437 square metres and opened under the Trustmart banner last month.

Mr McMillon said the return on investment in the compact format was equal to supermarkets that are more than twice the size.

“But the cost of operating it is less, so the (prices) are less,” he said.

Wal-Mart currently has 189 outlets in China, according to its website.