Wal-Mart (WMT), who has finally realized it international sales growth is crushing domestic operations said it expects to grow 30% annually in China, its most successful international operation to date.
In announcing the approval of its 100th store Monday, Terrence Cullen, vice-president of development for Wal-Mart in China, said “We intend to continue our aggressive, organic growth in China.”
Here is the real sweet number. Since 1996, the China expansion Wal-Mart has undertaken has cost them a whopping $230 million. That is it! If we are going to put that into perspective, Wal-Mart pays shareholders almost $700 million per quarter in dividends. What Wal-Mart receives from China for the money it has invested is essentially a gimme.
There has been speculation that Wal-Mart is at the mercy of the Chinese gov’t and that the growth there is precarious. Quite the contrary is true. Wal-Mart buys in excess of $18 billion annually from China, making it buy far the largest purchaser of good from the country. If the Chinese have proven anything, they have shown they will not cut off their nose to spite their faces.
Wal-Mart and the Chinese officials have a very mutually beneficial relationship that will undoubtedly grow stronger as time passes. Good news for shareholders…
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