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Walmart looks to Asia for continued growth

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SHENZHEN, China — Asia, along with Latin America, will be a key driver of sales and earnings growth in years to come, Walmart executives said at an investors conference here this week.

Asia, along with Latin America, will be a key driver of sales and earnings growth in years to come, Walmart executives said at an investors conference here this week.

"In a nutshell, what we’ve got to do is continue to drive some growth in the really profitable markets like Mexico and Canada where we have terrific returns, continue to drive growth in a country like the United Kingdom, and then simultaneously lift these other international markets, countries like Brazil, places like China, to a higher level of profitability without slowing down the growth so the portfolio has a better return," said Doug McMillon, president and chief executive officer of Walmart International.

Scott Price, president and CEO of Walmart Asia, noted that Asia will contribute 35% of the sales growth in Walmart’s international business by 2016, compared with the 15% it generated in 2010. That expansion, he added, will come from a number of strategic levers: comparable-store sales growth, new stores, new market entry and e-commerce.

Both organic growth and possible mergers and acquisitions may drive new store additions and new market entries. Organic store expansion between 2010 and 2015 is projected to be about 20%.

One key growth driver in the region is the ongoing expansion of the middle class, which is expected to account for nearly 65% of Asia’s total population by 2015, up from just 26% in 2005. That socioeconomic trend will help drive an estimated 50% increase in the region’s retail market between 2010 and 2015, trailing only Latin America at 53%.


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