What happens when the world’s largest retailer decides to plant an e-commerce flag in the world’s most populous country? We’re about to find out.
Walmart announced this week that it has finalized an agreement with Shanghai’s government to set up an office in the Chinese commercial city that will serve as headquarters for the retailer’s entire e-commerce operations in China.
As part of the deal, the parties will work hand-in-hand on a training program for e-commerce personnel to accelerate the overall development of online retailing in the country.
“The scale of online sales in China is expanding rapidly and is projected to match U.S. online sales in the next few years,” said Wan Ling Martello, Walmart’s executive vice president of global ecommerce and emerging markets. “We are very optimistic about China’s e-commerce market and its growth potential. With Shanghai as our Global eCommerce’s China headquarters, we look forward to offering Chinese consumers a wider selection of quality products at good value with a great online shopping experience.”
The new office in Shanghai will report directly to Martello and Walmart Asia’s president and CEO, Scott Price.
Though Walmart has operated physical storefronts in China since 1996, it wasn’t until recently that it set its sights on establishing a stronger online retail presence in the country. As part of that strategy, the retailer bought a minority stake in the Chinese e-commerce site Yihaodian last month.
Of course, Walmart is hardly the first U.S. retailer or e-commerce group to invest in China’s potentially huge online retail market. This year alone, Apple, Gap, PayPal and Groupon have all set up shop there, and for good reason, too.
China’s Internet Network Information Center, the arm of the Chinese government that looks after the country’s web infrastructure, estimates that there were 161 million online shoppers in the country at the close of 2010.
Meanwhile, reports from Forrester Research project that online sales in China could reach nearly $160 billion by 2015. By comparison, e-commerce sales totaled less than $50 billion last year.
That’s a lot of shoppers and a lot of potential revenue, to say the least.
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